| Author | Message | ||
     Pipeline Side Hero Username: Pipeline Post Number: 9092 Registered: 05-2009 Posted From: 161.141.1.1 Rating: N/A |
right now Aug 60 calls are trading at 6.70ish (underlying is $63.17 currently). if it goes to $66 by July/Aug; option price will go up to about $9.5; you will make about 40% but if it drops close to $60 you will loose about 50%. It's not the right risk reward ratio., my two cents. | ||
| Vjawarrior Side Hero Username: Vjawarrior Post Number: 5473 Registered: 02-2014 Posted From: 153.2.247.32 Rating: N/A |
agreed for year end options...My thinking is that if FSLR hits 65-66 by july, 60 AUG calls will goto 9-10 bucks which is 80% more than the present ani naa idi...its consolidating very well anipipistundi...Ur approach is very good with no risk at all...Underlying is safe... | ||
| Pipeline Side Hero Username: Pipeline Post Number: 9088 Registered: 05-2009 Posted From: 161.141.1.1 Rating: N/A |
about FSLR - This stock looks like it is setting up for a strong bull run. However, this is an example where the underlying might be a better bet. Say you think it is going to 80 by year end, which is not out of the question. That gives +27 percent if you buy the stock. If it goes half-way or so (i.e) 70, you get +11 percent and at 60 you get -4.5 percent. Buy the 60 call instead, and you have to put up 10.30 to play. If it goes to those same 3 outcomes you get +94 percent, -6 percent and -100 percent. In other words, the options are very pricey. I don't want to still lose money when my pick has run up nearly 2 percent a month for half a year. But the thought of earning a clean 10, 20 or 30 percent on the stock by year end is appealing. |
