LULU ==> The Beat the Streets Winner

[JohnHenry]

Mr. Market

Since you responded to my other thread about steady income by selling covered calls, I figure you want to make some $$$. Since you're holding LULU stocks now and just sitting on it waiting for your $45.09 target, What if I tell you right now that you can put those LULU to work tomorrow and see $$$ depositing into your account while you're waiting for your LULU to bring you the meat and cheese.

Let's make a few assumptions based on your initial LULU writeup

1. You bought LULU @ 39.13.
2. You want to sell LULU @ 45.09 in 4-6 weeks, and willing to hold until you reach your target.
3. Let's assume you bought 1000 shares of LULU for total of $39130

So, instead of sitting on your shares you can make some $$$ right now by doing the following:

1. First you will need to remove your sell limit order which I assume is $45.09
2. Sell the June 18 $45 calls for .65 (today's closing price)
3. Assume you have 1000 shares of LULU, by selling the June covered calls, you will instantly have .65 x 1000 = $650 deposit into your account.

What's next?

1. Since you sold the covered calls for the $650 premium, you CAN NOT sell your LULU shares until after June 18 expirations.
2. From now until expiration, when LULU went past $45, someone "may" buy away your shares for $45/share which is OK because your target was to sell @ $45 anyway.
3. Upon expiration on June 18, if LULU is below $45 you get to keep the full premium of $650 with your shares untouched.

So there you have it, an extra $650 to buy yourself a lot of meat and cheese.

Hi Wooish

Are covered calls easy to learn? If so, how?

[wooish]

JohnHenry

Selling covered call is easy. The basic idea is you simply buy and hold a minimum of 100 shares of certain stock and you can sell 1 contract (100 shares) for a premium. You should be able to start selling cover calls after a few hours of reading. Here's a good start http://www.cboe.com/LearnCenter/Tutorials.aspx?id=cboe

Good luck

[riverbabe]

JohnHenry

Selling calls on stock you own is a nice bet if you think the market will go down because you collect the premium and keep the stock. But if you think the market is going up, either sell a way-out-of-the-money call, or don't sell it at all. That way you can keep the stock and the profit if it does go up.

[dmk112]

love this stock right here

[mrmarket]

Looks like we are getting close

[steelman]

Looks like we are getting close

$$$MM$$$, Investools has a projected price of $107 and it just beat profit estimates, no surprise there. It's resistance of $44 should become new support. The S&P closed above it's 30 day MA today, LULU is going over $50!

[peanuts]

This is one of the better picks. I've been liking this stock for a long time, now. 15% is peanuts ... you can do better than peanuts with LULU

What happened to Louetta?

[microchips]

This is one of the better picks. I've been liking this stock for a long time, now. 15% is peanuts ... you can do better than peanuts with LULU

What happened to Louetta?

Peanuts,
Never mind Louetta whats up with PCLN,CSH and CSTH?.

[peanuts]

Peanuts,
Never mind Louetta whats up with PCLN,CSH and CSTH?.

PCLN- hurt by Eurotrash slowdown... all those holidays no longer seem so cheap when you've got to pay upfront in Euro
CSH- Cash America? Stay away from American cash... recovery on the horizon makes this stock a long term nightmare
CSTH- I don't know this symbol, but if you are referring to CTSH, well then, ding ding ding, we have a winner!

[microchips]

PCLN- hurt by Eurotrash slowdown... all those holidays no longer seem so cheap when you've got to pay upfront in Euro
CSH- Cash America? Stay away from American cash... recovery on the horizon makes this stock a long term nightmare
CSTH- I don't know this symbol, but if you are referring to CTSH, well then, ding ding ding, we have a winner!

Guess which 2 out of the 3 i"m holding?. Sold the other 1 last week!

[JohnHenry]

Selling calls on stock you own is a nice bet if you think the market will go down because you collect the premium and keep the stock. But if you think the market is going up, either sell a way-out-of-the-money call, or don't sell it at all. That way you can keep the stock and the profit if it does go up.

Thanks Wooish and Riverbabe!

[riverbabe]

What happened to Louetta?

I've been wondering the same thing.

[steelman]

A fantastic move today!! I hope the MO will keep going through next week. I missed an opportunity to sell my Sept Calls because I wasn't able to keep up with my positions a few weeks back. I am hoping to get a little back!