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Long-Term Contingent Purchase

  • Michael C. Thomsett
Chapter

Abstract

The second of two installment strategies is the long-term contingent purchase, the acquisition of a LEAPS call for freezing the strike at today’s price for action in the future, as far away as two and a half years. This allows an investor either to acquire shares in the future at a price below market value or—if the underlying price declines—to avoid purchasing shares that do not appreciate. Opening a series of short-term short options during the period the long call is open eventually takes the basis in the call to zero.

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Michael C. Thomsett
    • 1
  1. 1.Spring HillUSA

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