Re your option play, including this part:
"I owned Feb. 55s - sold em at 3 1/4, then bought Feb. 45s at 6 5/8, then sold Feb 55s again (to open) at 3 1/4. Not quite even money exchange, but at 1/8th point difference w/o commission cost included,
I'll take it. FWIW, got the 55s back a while ago when the stock was at about 53.5, they cost me 7 3/8; Thus if AGPH is over 55 at expiry in Feb, I can still make 2 5/8 on the spread, or about 30+ % at maximum."
Randy, none of my business really, but I like your new trade a lot better than your old trade. AGPH is very volatile and you really pay for it in the options, so I think selling covered premium is always smart with this stock, if you like options and you want to go out a few months. For your old trade to break even, AGPH had to get to 62.5 (or to 70 for 100% return). Both these prices are well above the all-time high (so far) of 56.5.
John W. was only calling for 70 by Nov, so you had to be more bullish than that to do your old trade, it seems to me. In my opinion, since option trading leverages you to the gills by its nature, one should be conservative on price expectations. As your new trade shows, there is plenty of money to be made just planning for a rebound without relying on new all time highs.
Good luck and watch for that bounce!!! |
