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Strategies & Market Trends : Value Investing
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To: Suma who wrote (43147)7/1/2011 2:28:23 PM
From: rllee   of 78673
 
CMG, PNRA, NFLX, CRM, LULU will rarely be of interest in a "Value" board. Nevertheless these are momentum names with high volatilities that can make you a lot of money because mutual funds want to own these high growth names. I have had very good luck with selling strangles on these names and collecting income from these high option premiums. One has to look at the charts and determine the trading range over 3 months or so to sell appropriate strike prices for the strangles. I typically sell strikes that have below 30% chance of being "in-the-money" at expiration in order to be relatively "safe" (i. e. giving my a 70% chance of winning) in owning a particular strangle. The goals is to have the stock price end withing the trading range chosen for the options to expire worthless and thus collecting premiums on both ends of the strangle.
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