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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (188357)1/26/2015 9:18:17 PM
From: Keith J1 Recommendation

Recommended By
CommanderCricket

  Read Replies (1) of 206325
 
Ed,

Couple options.

Agree with Bob July is probably too long in time. If you need/want to do buy/write, I'd look at the March 20s for ~1.50 or 21s for ~1 if you want to give yourself a little upside. If under your strike at expiration, just rewrite 2 months out.

Or, you could sell at the money put - March 20s for ~1.40; or slightly out of money 19s for ~95 cents.

Essentially gives you the same return for the 20s at the money. Lower return on the 19 puts vs. the 21 calls, but you need the stock to perform better to obtain that return.

Credit Suisse has a 21 target for CHK, so they aren't overly optimistic on price improvement from here. FWIW. The 19 puts are the most conservative investment here, and is pretty aggressive given uncertainty in the energy market.

Or could go further in time and sell July 17 puts for ~1.10 or 18s for ~1.45 if you want to trade time for more price protection. Or possibly the April 18s for ~88 cents if you don't want to go quite so far in time.

KJ
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