Scott:
You said in a previous message that your cost basis was around $17 on this stock. You didn't say how many shares you had, but if you have 100 or more, you could make some quick money by selling covered calls.
Right now you could sell the March 20 call for about $2 a share or the March 22 1/2 call for about $1 a share. If you have as many as 1000 shares, you could pick up $1000 - $2000 within two weeks. (March options expire on March 22.) If the stock price stays where it is, you certainly wouldn't be called out on the 22 1/2 option, and maybe not on the 20 option either. Even if you were, you would show a profit and could get back in on the next dip.
I did this prior to the split and sold options on 10 contracts (1000) shares at 50 for $2 a share. The price stayed below 50 and I made $2000 with almost no effort. For all practical purposes, that lowered my cost basis by $2 a share on those 1000. If you did the same, your cost basis would drop from $17 to $15, so if you were called out at 20, you would still be $5 a share to the good.
The general wisdom is that 80% of options never get exercised, so it is easy money to make by selling covered calls.
Walter High |
