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Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: kaka who wrote (3188)	10/14/2008 7:32:23 PM
From: Jerome	Read Replies (2) \| Respond to of 5891

GM...covered calls and puts.... With GM at $6.64 a share I would consider the following positions for Nov. expiration. Calls Nov. 6's GMKI are at 1.64/1.75 Nov. 7's GMKJ are at 1.18/1.24 Puts Nov. 6's GMWI are at 1.30/1.38 Nov. 7's GMUJ are at 1.80/1.90 The number of contracts are not of significance. All option positions have an undercurrent of risk. Consider the impact on your portfolio if things go poorly. GM is having a tough year, but is doing better than Ford, Chrysler, and Toyota. Bankruptcy is very unlikely considering the government cash handouts available. The call and put premiums are generous because the risk is considerable. If GM as a company make you nervous...stay clear of the options. I believe that you are going take risk...get well paid for it.