YHOO _ Buy-Write

Oct 6, 2011

Yahoo is in a new uptrend and with the company in the headlines for potential acquisition, the call options are carrying a higher level of interest which is pushing up the price. I believe it is a good time to sell those calls against holding shares of YHOO, which I feel are at a reasonably low valuation overall. I feel that a 6% return in the course of 2 weeks time until the options expire, is a decent return. I feel that the shares would return to $14 without the recent news, so that means the trade could break even. However, that's a trade I'm willing to take.