I'm considering to sell a contract of covered call of RJR.
Since its merger announcement, RJR has gained almost 30%; the current price of $56 has well exceeded my target of $52. However, I'm hesitate to sell it to claim the short-term capital gain in December. If I can hold on for another three months this can turn into a long-term capital gain (or $200-$300 difference in after-tax gain).
In the option market, RJR May 04 calls current sells for $4.60/$4.80 (bid/ask) for strike price of $55 and $2.35/$2.50 for strike price of $60. The $60 call looks attractive to me.
The big problem: I just found out I haven't enabled margin and option trading in my AmeriTrade account, where I parked my RJR shares, and I have no other brokerage account that allows me to write uncovered calls. I sent out the application to AmeriTrade this morning and hopefully I can conduct the covered call writing by early next week.