Tuesday, November 01, 2011
Thursday, September 08, 2011
Thursday, February 24, 2011
Option Trade of the Day
Given some of the sell off on Wednesday and given that Ford seems to have got their footing under them, there is some opportunities to make some money on in the money calls.
Buy Ford at the market price of $14.78 and at the same time sell a $14 March call for $1.15 which gives a $0.37 profit. If you do it for 1,000 shares you can net $332.39 at E*Trade after all the fees.
Given you are only in the position for about a month, you are getting a 27% annualized return and you have down side protection of about 8%.
If for some reason Ford drops below 14 in the next month, you own Ford at $13.67 given the profit you made on the calls you sold. You can then come back and sell another call for April.
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