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Thanks, Kaye, for your thoughtful and detailed response.
At least Fidelity seems to agree with interpretation (a), if their trades web site interface is any gauge. In my case, when attempting a “trial” trade, I notice that Fidelity has populated the unsold shares from the 1998-6/2000 period with the average cost calculated for the sale on 6/2000. For both uncovered and covered shares after 6/2000, Fidelity assigns the actual NAV for the date of purchase of additional shares. Thus, at least Fidelity seems to think that noncovered share purchased after my one and only sale should not use average cost.
Thus, I feel quite comfortable about interpretation (a), especially after your detailed explanation and Fidelity’s implicit confirmation.
Many thanks for your help.