Trying to understand the full implications of selling both short and medium/long expiry calls
I have been reading quite a bit on options, including the FAQ on the sidebar. But when dealing with money I like to be sure that I'm not missing something
My major point of confusion is with short term expiry/unqualified covered calls. Say I own 100 shares of stock XYZ that I bought five years ago. I then sell a covered call with an expiry of one week from now, making it an unqualified covered call, and I proceed to buy it back before it expires (or just let it expire). Does that then reset the holding period of my stock (meaning will I have to hold it for another year to qualify for the long term capital gains rate, or can I sell it at any time and still qualify for the long term rate)?
A link in the sidebar has this to say
> Like you mentioned, unqualified covered calls suspend the holding period of your stock. For example you sell a deep in the money call (sometimes called the last write) on a stock you have held for 5 years, the covered call is classified as unqualified, the holding period is suspended and the gain or loss on the stock will be treated as short-term.
Essentially, if you write an unqualified covered call, you better be sure you're ok with holding the stock for another year, unless you want to be taxed at the short term rate?
Now as for longer expiry calls, suppose I own 1k shares of a stock I bought at $100/share a couple years ago, that it is now $200/share, and that two things are true
1. I would have no problem holding the stock for another 6-12 months
2. I would have no problem selling it at $300/share
It would then make sense to sell 6-12 month expiry calls with a $300 strike price, right? The FULL implications would be that I would have to
-hold the stock until the call is bought back or expires (to avoid the risk of a naked call)
-miss out on any additional upside if the share price goes above $300/share
-Save some of the premium to pay for taxes on the premium
Is there anything else I am missing?