Back by popular demand. Options plays for the week.
With CYMI at 34 3/4 my plays will be the following two choices.
1) Call purchase. Buy some CYMI Nov.30's, which closed at 6 by 6 3/8 . These are already 4 3/4 points in the money. A rise in CYMI's price above 36 1/2 will make these nicely profitable. If CYMI closes ot the month of Nov. at 36 to 37 you will at least get your money back. An important consideration in this choppy market.If CYMI closes the month of Nov out at 40 the options will be worth 10.
2) Covered call writes. I'm long CYMI so I will wait until CYMI gets to 37 to 38 1/2 to write the Nov. 40's for at least 2 points.
Last week I suggested writing the Nov. 40 for a premium of 2 1/4 by 2 5/8. I did that myself and then undid the calls at a cost of 3/16, for a profit of 2 3/8. ( I got 2 9/16) for the calls.
Why do the 40's for a covered call? In the past week we have seen companies in this group report great earnings and the stocks responded by going south. (KLAC, COHU, HELX, INTC)The same could be in store for CYMI.
If it is market uncertainty that is of concern to the CYMI long, I would suggest writing the Nov.35'5 for 3 1/2. This will result in an immediate 10% gain. A good return in 34 days.
I did consider not posting option strategies for CYMER, after being ridiculed by Curlton for doing so. And at the same time I received a large number of private e mails's requesting that I continue to do so. Near as I can tell, this thread is viewed by many readers, reluctant to post but interested in options, and profitable strategies.
Good Luck this week, Jerome |
