edamo, I've been buying shares of a few different stocks this week (ATHM, CMGI, EMC, QWST) and last night is dawned on me that I would be much better off selling short term in-the-money puts.
For example, say I wanted 1000 shares of Dell. I could just buy them at 82-1/2 right now. Or, I could sell 10 Mar 85 puts for 6-1/2. If Dell is above 85 at expiration, I pocket the $6,500. If not, I get 1000 shares for a net price of 78-1/2, and save $4000. If I really wanted the shares I could sell 10 Mar 90 puts for 9-1/2. Either I pocket $9,500 a month from now, or I get 1000 shares for a net of 80-1/2 and save $2000 vs buying the shares right now. Makes sense? |
