I haven’t actually done this because I still believe my companiy’s stock will go up, so I don’t want to unload my calls. I’ve actually purchased additional calls on my company in the market, which, being a finance guy well versed in diversification is a dumb thing to do.
When the time is right, though, I will write naked calls (you actually aren’t naked when you have a perfect offset). I’m 100% vested, and have little fear of getting fired or laid off. This is actually a bigger issue than just hedging. If you excercise calls early, you give up option value, so I’d rather pocket that premium by selling naked calls in the market and running the other discussed risks than exercising early.
Put call parity says Stock + Put = Call + Present value of excercise price.
Another way to do this same thing (effectively sell the call), then, would be to Short the Stock & Sell puts at the same strike as the call. There’s a bit more to the mechanics, but I don’t have time to think it through right now. Technically, you’d invest the proceeds in a CD or the like, but usually, you don’t actually get the funds from the short if you aren’t a hedge fund (if someone has found a way to do this on a small scale, please let me know)
