Don't forget you have to deduct $3 from the share

Don't forget you have to deduct $3 from the share price. So $8 minus $3 equals $5. Current ask on the Jan '14 $3 is $5.20 Deep in the Money (ITM) Very little time premium. But not $3 cheaper.

(If you offer the MMs 66% of the spread you'll often get filled)

Break even is about $8 also ($5+$3)  But below $8 you lose and below $3 they expire worthless. So an option with time decay and an expiration date becomes a hard sell when it approaches the market price of the stock.

But the advantage is you have is $3 intrinsic value. Whereas the Jan '14 12 calls at 2.65 is all premium (extrinsic value) no intrinsic value with a break-even at $14.65

I did buy some $12 '14 calls myself.