I am having fun with this Joe. In addition to taking a bit, every time I sell for a profit, I am keeping one share. See if I cant get to 100 shares by the end of the year.
Guys...here is a buy/write strategy that I think is a very safe bet for money that you want to let sit from a fixed income standpoint.
Buy 100 shares of AUY. Price right now is 11.00 as I type. Immediately write a covered call to protect yourself. Call of choice for me in this case is AUY AV. January 2009 Option with a strike price of 12. It is selling for 1.30 right now.
To put into percentages, I think that we all believe that AUY will be at least where it is now by January, in the heart of the seasonal strength of the metals.
Lets say it finishes at 12.01 on option expiration. Your investment earns you 130$ plus 100$ minus commissions 13$ for a total of 217$. That turns out to be a fairly safe 9.5% return in a little less than 6 months.
Plus, you have downside protection and are still profitable down to AUY at 9.90$.
This is a buy/write...and a good one to use right now for money that is sitting in this doldrums we are in.
4 comments:
Booked 3.23 AZK @ 3.35.
I am having fun with this Joe. In addition to taking a bit, every time I sell for a profit, I am keeping one share. See if I cant get to 100 shares by the end of the year.
I see Bernanke Speaks on Financial Stability at 10 am I think (time is really messed up for me right now)
You think we get a financial bounce or sell off?
I haven't had time to follow markets lately but with with sell off the last couple of days a bounce this morning was expected
Added AZK at 3.23
Guys...here is a buy/write strategy that I think is a very safe bet for money that you want to let sit from a fixed income standpoint.
Buy 100 shares of AUY. Price right now is 11.00 as I type. Immediately write a covered call to protect yourself. Call of choice for me in this case is AUY AV. January 2009 Option with a strike price of 12. It is selling for 1.30 right now.
To put into percentages, I think that we all believe that AUY will be at least where it is now by January, in the heart of the seasonal strength of the metals.
Lets say it finishes at 12.01 on option expiration. Your investment earns you 130$ plus 100$ minus commissions 13$ for a total of 217$. That turns out to be a fairly safe 9.5% return in a little less than 6 months.
Plus, you have downside protection and are still profitable down to AUY at 9.90$.
This is a buy/write...and a good one to use right now for money that is sitting in this doldrums we are in.
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