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Author: jsibley Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121567  
Subject: sell and repurchase vs options Date: 6/26/1998 11:42 AM
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I can see that there a number of variables involved, but are you aware of a formula for comparing the after-tax consequences of selling and repurchasing a stock vs holding the stock and buying puts,assuming the following:

Stock has been held for more than 18 months
Stock has low cost-basis compared to current price
Stock is expected to drop before option expires
Stock is expected to stay low long enough to avoid wash sale
Stock is expected to bounce back long-term

I assume that a key factor is the time premium of the put option, but I'm not sure where the after-tax break-even is.
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