- TASR is our "Stock of the Decade".
- They've fallen from $34 to $20 on weak guidance but ridiculous over-reaction.
- We have an opportunity for a great long-term trade.
From the PSW Premium Member Chat room:
- hextra8 (premium) August 24th, 2015 at 12:27 pm|
TASR/Phil
Have Jan 2016 $10/$15 BCS for $1.94. Would this be a good time to sell this position or at least one leg of it? Thank You.
TASR/Hex - Wow, that's an old one! I'd just be happy to get the $5 (+150%) and not be greedy. If you can get a good price buying back the $15s (now $6.25) and then play the $10s (now $11.25) as a momentum play, that's not too bad but you are turning 150% in the hand into what? If you want to be more bullish, just pick up the 2017 $20 ($6.30)/25 ($4.15) bull call spread for $2.15 and sell the $15 puts for $2.40 for a net 0.25 credit on the $5 spread. If all goes well, you make 20x on cash (and about 300% on $1.50 margin too!).
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Actually, that's another good one for the 5% Portfolio as it makes over 100% per month on cash. Let's get 20 of the spreads and sell 20 of the puts.
I've changed my mind as I want to go with the more aggressive play and sell 20 of the 2017 $50 puts for $2.40 ($4,800) and use that money to buy 20 of the spreads for $2.15 ($4,300) for a net $500 credit.
This trade, if all goes well, will return $10,000 (plus the $500 credit) in 18 months so we should make about $500 per month if we're "on track." Anything over $20 is on track this year and next year we'll want to see $25 by June - not asking too much.
