YHOO covered call strategy
Buy Stock &
Sell Covered Calls
on YHOO at $16.
Dec 16th expiration
Options are 62 cents.
Return potential = 4% in 9 days
Risk is a loss starting at $15.38.
With takeover bids surrounding
YHOO, there is risk that no deal
gets done by year end and a drop
down to the $14 area where the
stock was prior to renewed t/o talk.
YHOO is a reasonable value in the
sector so buying the stock is comfortable
for me with or without a deal. For now,
it makes sense to make some extra
income from the speculators who are
paying relatively high prices for YHOO
call options in the hopes of a higher deal.
By: Technical Tim, 10:16AM EST, Mon Dec 5, 2011
Sell Covered Calls
on YHOO at $16.
Dec 16th expiration
Options are 62 cents.
Return potential = 4% in 9 days
Risk is a loss starting at $15.38.
With takeover bids surrounding
YHOO, there is risk that no deal
gets done by year end and a drop
down to the $14 area where the
stock was prior to renewed t/o talk.
YHOO is a reasonable value in the
sector so buying the stock is comfortable
for me with or without a deal. For now,
it makes sense to make some extra
income from the speculators who are
paying relatively high prices for YHOO
call options in the hopes of a higher deal.
By: Technical Tim, 10:16AM EST, Mon Dec 5, 2011
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