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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (40115)	11/19/2010 9:46:37 AM
From: E_K_S	Read Replies (2) \| Respond to of 78464

Re: Gastar Exploration Ltd New Ordi (AMEX: GST ) Hedged a portion of my earlier BUY by selling a few March $5 covered calls at $0.85. Stock on a run, up 14% in 16 trading hours. If the hedged shares are called away in March 2011, that's a 39% gain for 4 months. It's hard to quantify the "actual" value in these small E&P companies but the perceived value seems to change day to day based on news and investor expectations. As a result wide price swings can occur in a short time. Hedging a portion of the returns w/ covered calls helps me lock in a gain, move on with the investment while letting the larger portion of the share run higher. EKS