The option on TAL is not in the money and is near worthless at $0.05, but it’s still close to the strike price of $35 at today’s close of $34.66. To play it safe, it might be prudent to close the position tomorrow at nominal cost of a dime or so; then sell the TAL Jan 19 2013 $35 call at limit price of $2.50.
The option for DLX is in the money and thus is more complicated. RSY recommends purchasing the option back at $2.20 and then rolling it over to DLX Jan 19 ’13 $25 call of at least $3.00, which will result in a loss of about 60 cents on the last option but more than make up for the sale.
RSY has not recommended an option on CODI as there was never too much upside on writing the covered calls. RSY recommends the CODI Feb 16 2013 $15 Call at a limit price of $0.70.
Best regards,
Ronald Rutherford
Corporate Macroeconomist
Full disclosure: The author holds or will hold the stocks mentioned in this edition of Rock Solid Yields.
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