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Strategies & Market Trends : Gersh's Option trades -- Ignore unavailable to you. Want to Upgrade?

To: Mark Johnson who wrote (628)	11/24/2007 6:12:01 PM
From: Mark Johnson	Read Replies (1) \| Respond to of 652

DISH options have a big premium in the because they maybe bought out (or buy a portion of the company) by AT&T. Assuming that dish is bought out at $60 per share, that would mean that its shares would command a buyout pe of 25 based on 2008 earning estimates. One WS analyst thinks there is a 65% chance that Dish will be bought out (or a portion of the company) within the next 12 months. I like the premium of the Dec 2007 60 calls at around 40 cents and think they are worth shorting. Just keep in mind that you do not want to load the boat with shorting these calls, just in case DISH is really bought out. A better way to play the DISH options is to go against my conventional wisdom of only shorting calls. The buyout speculation on DISH has also increased the premium of the DISH puts. The December 32.5 and 35 puts (expires 12/21/2007) are bidding 35 cents and 85 cents respectively. I like the idea of shorting both of those options/strike prices. I believe the recent buyout speculation will keep the stock at a minimum trading range over the next few months, trading above the $37 range. The January 30 puts (expires Jan 18/2007) are bidding 60 cents, which is also very attractive, which I strongly like. The recent buyout speculation has added significant premium to the put and call options. I see the shares of Dish having limited downside, because of a consistent revenue/earnings stream and that is why I like the idea of shorting the put options. Those are 4 option ideas that I consider shorting. Best of success option shorters!!