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

To: kaka who wrote (3196)	10/16/2008 11:53:56 AM
From: Bridge Player	Respond to of 5891

Thanks for the explanation. Sorry I was so critical. That said, I think the terminology used for a single buy/write transaction is poorly worded. If anybody here still retains their sanity along with any money, here's a new idea. Buy a 1/2 position in Garmin, GRMN, at 23.50. Sell Nov 25 calls for roughly 1.90, and sell Nov. 20 puts in amount equal to the other half position, at roughly 1.75. Garmin is down from around 120 a year ago. Recently expected earnings for 2008 and 2009 are in the range of 3.80 or so. I expect these to be cut sharply due to reduced consumer spending. But I don't expect GPS sales are a fad and should continue to grow. Market penetration is still way short of its potential. I expect maybe 2.80 to 3.00 which would give a multiple of around 7 on your cost basis if put additional shares, on a growth technology company.