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Strategies & Market Trends : Short-termSelling Puts (Covered Calls by another name) -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (3)	2/4/2006 1:58:35 PM
From: IRWIN JAMES FRANKEL	Respond to of 66

Great idea Rocky - I will participate as time allows. robo>> most interesting to me are MNTA and ELN, although ELN scares the bejesus out of me ELN should do just that. I would be more likely to buy the puts on that one for the reason you state. --- I try not to get fancy with options. But one of the approaches that has worked very sell for me is selling both calls and puts at the same strike or spreading the strike. That way you are certain to have one and at times both options expire worthless. If I think the stock could run up then I own the stock so I am basicily doing a covered write with the additional income from the put. E.g. Own 100 ALXN 30.60 sell March 30 call 2.10 and put 1.40. Net investment 27.10 for 42 days. About 10% return in 42 days provided the stock holds 30. E.g. Own 100 MNTA 20.50 sell 20C 1.30, P 0.70 Net 18.5 for 42d. Or 8% in 42 days provided stock holds 20. Considering my view that MNTA is cheap I would write the puts and not cover the stock with calls. Or I would even consider writing ITM puts. It is not biotech but I think COP is cheap and part of that is likely caused by the BRL acquisition hedging. On it I have been buying ITM LEAPS calls (50) and selling LEAP puts (60). I posted about this on the BV thread: Message 21971569 In executing the COP trade which I described as delta neutral I ended up with very a very small net debit, so much so that the trade has virtually printed money. :-) ij

To: Robohogs who wrote (3)	2/4/2006 1:58:50 PM
From: IRWIN JAMES FRANKEL	Respond to of 66

Great idea Rocky - I will participate as time allows. robo>> most interesting to me are MNTA and ELN, although ELN scares the bejesus out of me ELN should do just that. I would be more likely to buy the puts on that one for the reason you state. --- I try not to get fancy with options. But one of the approaches that has worked very sell for me is selling both calls and puts at the same strike or spreading the strike. That way you are certain to have one and at times both options expire worthless. If I think the stock could run up then I own the stock so I am basicily doing a covered write with the additional income from the put. E.g. Own 100 ALXN 30.60 sell March 30 call 2.10 and put 1.40. Net investment 27.10 for 42 days. About 10% return in 42 days provided the stock holds 30. E.g. Own 100 MNTA 20.50 sell 20C 1.30, P 0.70 Net 18.5 for 42d. Or 8% in 42 days provided stock holds 20. Considering my view that MNTA is cheap I would write the puts and not cover the stock with calls. Or I would even consider writing ITM puts. It is not biotech but I think COP is cheap and part of that is likely caused by the BRL acquisition hedging. On it I have been buying ITM LEAPS calls (50) and selling LEAP puts (60). I posted about this on the BV thread: Message 21971569 In executing the COP trade which I described as delta neutral I ended up with very a very small net debit, so much so that the trade has virtually printed money. :-) ij