A question on Disqus today regarding ATT Stock makes for an interesting quick look. Let’s review his question and then look at the rescue strategy he should be using and why.

Investor Question:

“I STO Nov 14 ’33′p for .35 expired OTM. I STO Dec 12 ’34′p for .34 (17 days left). My plan was to take assignment if the stock price looked like it would stay within a few percent of the strike. Looks like it could go lower (32). My cost basis if I take assignment is 33.31. I am thinking of taking assignment and wait for X div date and then sell CC. My cost basis would be $32.85 plus call prem. I don’t see rolling out and down to Jan 15 33p where I would break even at best, an option. I don’t want to add any more contracts. Does my plan make sense? I am beginning to believe you can’t teach an old dog new tricks.  LOL. from GKOption”

Old Dog New Tricks

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