Be glad to. Here is an example:
CMGI is making a flag and when it breaks out above 288 resistance with volume, next target is around 365. I have been moving my calls up from its breakout at 115 in November.
Intraday chart yesterday showed reversal at 263 1/4. Jan 300 calls (GKK AT) were bought on reversal from this support for 17 1/2. They are profitable at yesterday's close- 19 3/4 - and my exit will be under one of the following conditions: 1. Sell 1/2 when the option price reaches 35; 2. If CMGI fails to break out from 288 resistance; 3. If it makes a reversal stick or breaks 263 support. 4. Sell on the day prior to split.
This is a low risk, high reward trade, made entirely out of profits from my previous pyramids since CMGI's gap open at 115 on Nov.17. I will not carry all these options through their expiration date.
And I still have remaining Jan 200 and 260 calls. I will sell them and convert some of the profits into OTM Jan 2002 LEAPs at the time of the split. Highest strike price for them now is 290 and premiums are high. Like QCOM and JDSU, premiums are likely to drop after the split. Same strategy applies to DCLK, EMLX and NOK.
There are other setups like CMGI, for example, JDSU, MSFT, DELL, BRCD, VIGN and many others begging to be bought. These are all strong companies with excellent chart patterns.
QCOM Jan 2002 LEAPs are at 56-59 and LEAP puts are at around 61. A synthetic long of these options can be done with credit and looks quite attractive as well for longer term players. In case QCOM drops, I have no problem buying it at 140. My calls would have been long gone. I am planning to sell some of my QCOM shares and use partial profits from sale of calls on Thursday for such trade on Monday.
Again, I do not care about the Greeks because I am looking at hard $$ return on my investment.
Hope this post is not too long.
Regards: |
