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Strategies & Market Trends : Option Trades
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To: zx who wrote (2330)9/7/2000 8:29:42 PM
From: architect*  Read Replies (3) of 2341
 
CAMP selling off after hours, earnings look inline with estimates to me??
I would be a buyer of CAMP @ $36 so these options positions would work for me.

CAMP option premiums for SEPT are very high! so with expiration only a week away I would be a seller of calls and or puts, if you are bullish long term and CAMP moves up or sideways after earnings.....
sell the $40 covered calls pocket $4.50 in premium.
Your break even is $35.5 and above, and over $40 = 10% ROI

if you sell the $40 call and sell the $40 put - pocket another $4 in premium total of $8.5 in pocket
if CAMP closes over $40 you keep all $8.5 in premium 20% ROI
and your break even is $35.75 and above

if CAMP closes under $40, remember you have to buy more common to cover the naked put, so your break even is still $35.75 and above, @ $35.5 You lose $4.5 on the shares you own and $4.5 on the shares you buy @ 40 to cover the naked put. the $8.5 in premiums reduces your cost on your new shares to $31.50,

A less aggressive options position would be to sell the $45 covered calls and sell the $35 puts naked.

if CAMP moves down after earnings sell your common and then sell a $30 or $35 put.
The pocketed premium will either reduce your share cost and/or off set your loss.

LRCX KLIC are holds for me, I've been selling covered calls
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