| Author | Message | ||
Vjawarrior Side Hero Username: Vjawarrior Post Number: 6329 Registered: 02-2011 Posted From: 98.230.188.189 Rating: N/A |
thanks a lot for explaining bro.... looks like the guy is betting huge tht Nokia will be above 7 usd by 2015...lets see Naakonchem tikkundi...kaani daanikoka lekkundi... | ||
Chillarodu Side Hero Username: Chillarodu Post Number: 3434 Registered: 03-2008 Posted From: 74.94.165.210 Rating: N/A |
You have to have atleast $60000 in margin to execute this trade. 1.>>>>Sell 100pc Jan 2015 $7 put @ $4.00, collect $40,000.00 This means you sell 100 contracts of Jan 2015 puts at $7.00. So you are obligated to buy the nokia for $7.00 This leg will get you $40000 as Jan 2015 $7 put premium is $4.00 (Note: If someone excericises their options then you have to buy 10000 shares of NOK at $7.00 from them. So you have to pay them $70000 and you will have 10000 shares in your account) 2.>>>>Limit buy 10,000pc NOK $3.30, pay $33,000.00 You are buying 10000 shares of NOK at current price. current market price is $3.30. So you will pay $33000. 3. >>>>Buy 100pc Jan 2015 $7 call @ $.30, pay $3,000.00 You are buying 100 contracts of Jan 2015 call for premium $0.30. So you have to pay $3000 1: $40000 2:-$33000 3: 3000 ----------------- $4000 this is the credit you will have in your account after executing the above 3. Now, with all of the above trades, your Max Risk = -$65090 (If Nokia becomes 0) Max Profit = Unlimited Your Downside Breakeven = $3.26 If Nokia goes below this price you will loose money. If NOK goes to $2.2 you will loose $20000. If NOK goes to 4.2 you will gain $20000  Overall it looks same as you buying 20000 shares of NOK... I won't recommend this. | ||
Vjawarrior Side Hero Username: Vjawarrior Post Number: 6328 Registered: 02-2011 Posted From: 153.2.247.32 Rating: N/A |
Can u explain the below strategy: I saw this on yahoo msg board. Sell 100pc Jan 2015 $7 put @ $4.00, collect $40,000.00 Limit buy 10,000pc NOK $3.30, pay $33,000.00 Buy 100pc Jan 2015 $7 call @ $.30, pay $3,000.00 Balance $4,000.00 - Tax and tip and some pocket change for more NOK. Folks I'm no millionaire, I just know enough to be dangerous. I'm going to stop by Scottrade and see about getting some margin. If I do this, if I move forward and have enough time, this will make or break me Naakonchem tikkundi...kaani daanikoka lekkundi... |