Options: Low Cost Investing

[New-born baby]

Sirf Update

SIRF is right now trading at $35. I could cover my $35 MAY calls (received $4.40) for $2--and sell the stock and be up a little right here. Paid $37.17-2.40 call profit-$35-$1.05 (cover cost $10)for the stock=$118 profit. Not going to take it. I want some more.

SIRF #2:
sold the $30 call for $5. Still holding $35 call

[New-born baby]

Tom

[/QUOTE]

Tom,
I hope you are okay with EOG.

[TFred]

Greetings,

Thanks for your concern,I never bought it,sorry if it was implied.It was a hypothetical set up to see if I had selling the calls correct.I was going to look at it more seriously around $72,don't know what its at now,assume its dropped?

I own nothing as of now,have been attempting to trade YMs with Spike,and so far gettng my A$$ handed to me.Market has me bewildered,either big money thinks oil's going to drop,or they're sure the fed is done.

Getting close to going back to trading Can swings,boring,but I've rarely lost money with them.Could you give me a site where you found out about EIT.UN?Would like to research it for my IRA.Also,can you buy Canadian issues in an IRA?

cordially Tom

[spikefader]

Sorry to hear that about the YMs Tom. Are you compromising stops? And what method have you been using anyway? Stab in the dark perhaps a problem is that you're trying to work and trade when you can fit it in, perhaps during choppy lunch times?? And then not prepared to walk away with stops in place so you close out prematurely in green fear??

If you're getting chopped up while attempting to scalp then take a step back and trade less and put the numbers on your side. Your risk reward is obviously not efficient enough.

[New-born baby]

Eit.un

Greetings,

Thanks for your concern,I never bought it,sorry if it was implied.It was a hypothetical set up to see if I had selling the calls correct.I was going to look at it more seriously around $72,don't know what its at now,assume its dropped?

I own nothing as of now,have been attempting to trade YMs with Spike,and so far gettng my A$$ handed to me.Market has me bewildered,either big money thinks oil's going to drop,or they're sure the fed is done.

Getting close to going back to trading Can swings,boring,but I've rarely lost money with them.Could you give me a site where you found out about EIT.UN?Would like to research it for my IRA.Also,can you buy Canadian issues in an IRA?

cordially Tom

Tom,
EIT.UN--Stockhouse.com is the best place to look. And ask question on the message boards, too. Be warned: those guys can be extremely rude.

Sure, you can buy Cans for your IRA.

EOG: did you read my earlier posts? I am going to post them next.

[TFred]

Greetings,

Thanks Spike and NBB for the repiles,

As far as the YMs,you hit it on the head,its not something to do IMO casually,hands off,until your comfortable with your strategy.I still love the leverage and volatilty,but am still out of sync,as far as hitting the sweet spot.Plus I need to adjust my stops and targets on booktrader for the strategy Im looking for.

NBB if SIRF were to break upward strong,would that leave you with many naked calls,if you sold them down?Trying to have a strategy for the unexpected gap up.If the price continues to fall,higher strike options become no problem,what do you do if it gaps up on you,with what I understand is progressively lower option sales on the same shares?

cordially Tom

[TFred]

Greetings,

Thanks for the info on EIT.UN,found their site,and a new IPO,EOS.UN,an oil sand energy trust fund.Yield is only 5%,and don't know anything about it.Something I'll keep an eye on.

Also I think COS split,and doing some reading found out T.Boone has SU and COS as his largest holdings,you're in good company NBB.

Cordially Tom

[New-born baby]

NBB if SIRF were to break upward strong,would that leave you with many naked calls,if you sold them down?Trying to have a strategy for the unexpected gap up.If the price continues to fall,higher strike options become no problem,what do you do if it gaps up on you,with what I understand is progressively lower option sales on the same shares?

cordially Tom

SIRF will probably move up for a day or so before proceeding South.

SIRF $45 calls are covered at $10, making a profit of $40 on one call and $45 on the other. The $35 call is easily dealt with this way: cover the lower strike and sell a higher strike. Example: originally sold that $35 for $4.40. Cover it here at $170 and hold that $30 call. If you are convinced SIRF will proceed higher for a day or two, wait and then re-sell an option that you believe will finish out of the money. $45 strike perhaps, or the $40 call.

[TFred]

Greetings,

While still looking into this play,I came across a good read on comparing current month covered calls performance,compared to outright buy and hold.

CC strategy outperformed in all categories except strong bull markets,they recommend selling in the money calls for the current month.Sound good ?

cordially Tom

[TFred]

correction,

They liked at the money calls,not in the money.

BTW will be changing my avatar soon,it does make me appear a sophisticate.

cordially Tom

[New-born baby]

Sirf

Greetings,

While still looking into this play,I came across a good read on comparing current month covered calls performance,compared to outright buy and hold.

CC strategy outperformed in all categories except strong bull markets,they recommend selling in the money calls for the current month.Sound good ?

cordially Tom

Sounds good, Tom. And we are not in a strong bull market right now (as you know). I think it is something you might want to investigate.

EOG set to pop higher on Friday. In fact I look for EOG to move up all week long.

[New-born baby]

Thank you

correction,

They liked at the money calls,not in the money.

BTW will be changing my avatar soon,it does make me appear a sophisticate.

cordially Tom

A new avatar would be much appreciated on this end

[New-born baby]

Su

SU is HOT. I think you should consider taking a long on this one with a bull call. SU currently has a price target of $109. Like to milk some of that cream out of this one for cheap? Simple: buy the $90 JAN 07 calls for $1210 per contract. Too much money? Then SELL the $100 JAN O7 calls for $960, or in other words, it will cost you $250 for the potential to take $1000 out of SU by JAN 07. Now isn't that cheaper than spending $9000 to buy 100 shares? And you can't lose more than $250, either.
__________________

[New-born baby]

Sirf

Here's an update on my SIRF play.

Bought at $37.17

Sold MAY $35 calls at $4.40
Covered MAY $35 calls at $1.50 for $290 profit per contract

SOLD MAY $45 calls at $50 and $55
COVERED May $45 calls at $10 and $10

SOLD MAY $30 calls at $5
Covered MAY $30 calls at $4.80

SOLD MAY $35 calls at $1.50 (still own)

Current situtation: $37.17-$2.90 (profit from $40 C)-$85 (profit $45C)-$20 (profit $30 C)-$1.50 (MAY $35C)=$31.72 (my real cost in SIRF), and set to be called away at $35 for a profit of $3.28 per share.

Frankly I am bullish on SIRF right now. I think it finally ran out of sellers, and I know that SIRF has INCREDIBLE support at $33.50 and $35. I just couldn't believe how tenancious those SIRF bulls are at these levels. I wonder if Benard Bernarke is committed to holding this stock up. It may charge all the way up to $40 again before MAY 19.

Now, do you see that this system can work? And by the way, if you are short SIRF right now, I'd say get out of the way, because I think a lot of buying pressure is going to push SIRF higher quickly.

[TFred]

greetings NB,

Let me run one past you,

Buy 1000 sh PVX at $12 - $12000

Sell Dec 06 $12.50 calls for .40 = $400.00 credit

Until PVX gets optioned away you also collect .10 per month,or $100.minus 15% Canadian tax = $85

With the income stream,it seems an even better option play,until it gets called away,you collect payments every month.

You know as well,ex-date dips provide betteer positioning

cordially Tom