Vandollar,
I'm jumping in the middle of this thread because I see no one has responded to your question.
A trader who is "short" a call - has sold a call against stock he owns - might consider closing the short position by "buying back" the call. Buying back the call for a nickel is a pretty good deal if you originally sold the same call for a higher amount.
Looking at the posting below, clearly John already owns the stock and sold a call on it some weeks ago. He cannot sell the JAN calls until he frees up his stock from the DEC commitment. Remember, his stock is what is "covering" his short call, so he can't sell a new call until he closes (buys back) the old one.
With respect, if you find this confusing, there are great tutorials about all this at the OIC website. Definitely worth your time.
http://www.optionse
I hope this helps.
Lance
--- In ConservativeOptionS
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> Why would you buy the Dec $12.50 calls even for .05? Wouldn't it be better just to buy the stock for $11 and sell the jan $12.50 calls? This is the part of CC call trading I don't understand thanks
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