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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 72.11

-0.3%

Nov 5 3:59 PM EST

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To: robert b furman who wrote (77199)	10/16/2013 3:19:15 PM
From: lml	Read Replies (1) of 77397

My only comment is to consider your cost of capital given the lengthy term of your option position. You're tying up $75,000 (15 x 5000s) for 15 months, that nets you 2.8%, or about 2.25% per annum. Don't you think there are better safe bets on CSCO than such as the one u just took on that net you a higher return? You might have considered writing 40 puts on Apr 19s, which sell for approximately $0.45. Such a play would tie up $76,000 (19 x 4000s) for 6 months & net you a 2.37% return in that time, or about 4.75% per annum, more than doubling your annualized return. If the position expires out of the money, you have the opportunity to put another position over your lengthy time frame, such as selling Jan 15 puts, adding to your ROI. Just a thought.

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