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Strategies & Market Trends : Telebras (TBH) & Brazil
TBH 0.333-11.2%Feb 12 3:59 PM EST
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To: Jerry A. Laska who wrote (1661)4/14/1998 9:43:00 PM
From: Steve Fancy  Read Replies (2) of 22640
 
Jerry and Dr,

You guys might want to consider the alternative of selling naked puts to get into the stock. You could sell the May 130's for around 5 I believe. As long as the stock stays above 130 it's money in the bank while only risking 20% of the stock price. If the stock pulls back to say 127 by expiration (unlikely IMO) you end up buying the stock for 125.

For the amount of money I put in the bank for May options already, the stock would have to be above 143 at May expiration for me to lose over owning the stock and I've only tied up 40% of the stock price. In that I've sold 130's, worst case is I pay 123 for the stock. As long as you don't sell a spread, ie leave them naked, you can get of of the options easily in case of trouble.

I'm considering selling May 135's, but may wait and sell June options on Monday. I'll keep you posted on my trades if you're interested.

Food for thought. Good luck.

sf
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