I've had a few people ask so wanted to post something for everyone - especially considering I have a lot of content around selling covered calls such as:
- You Have An Employee Stock Purchase Plan Now What?
- ESPP Options – Account Configuration
- ESPP Dividend Reinvestment
- Reporting ESPP taxes
For those folks who own Microsoft stock or who are employees and are getting their ESPP shares and annual vesting this month and next I wanted to caution not to sell covered calls for September or October unless you really want the shares to be called away from you. If you have owned some shares for a long time and want to exit the position (remember owning too many shares is a risky proposition) then keep at it.
Currently for me though I have sold plenty of shares and am in the position where selling covered calls is for income and the new shares I am about to get will be shares I don't want to get rid of right away. For all of these shares I have no plans to sell covered calls as there is a high likelihood of volatility in $MSFT stock given the Ballmer announcement. Of course things will settle a bit and hopefully they trend higher towards that elusive $40 mark. If they do I'll be happy to get back into selling covered calls above $40 and will be thrilled to have those shares called away.
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