Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW) nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Contact us: support@philstockworld.com
© Copyright - PSW, LLC.
2024
July 4th, 2010 at 8:59 pm
Happy Holiday Phil! Since you are in the middle of this politics debate, I’m assume your mind is preoccupied with it, but I do have an investing question. We can deal with it later if you wish.
A week ago Chaps made an observation for possible buy/write, and you came back with a suggestion for synthetic buy/write:
chaps
June 25th, 2010 at 10:08 am | Permalink
RIG: Jan 2012 50 P + Cs can be sold for about $28.50 as part of a buy-write on a $50 stock price.
RIG/Chaps – I’d go for the 2012 $40/65 bull call spread at $11 and sell the $35 puts for $7.60 for net $3.40 on the $25 spread and your worst case is you own RIG for net $38.40 (now $50.24) with a 635% upside at $65 and a BE at $43.40. Your buy/write is good too.
I seem to remember you saying in a post several months ago that you don’t own a lot of stock, that you prefer to work with the options…. am I remembering correctly? Also, do you always look at both possibilities, the buy/write and the synthetic? And what parameters make you chose one over the other?
Couldn’t find anything about this in the archives, although I’ll bet it’s there. Thanks.