Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
It depends when you enter the play. You won't get .30 for the 5 calls today (0.23 bid). But yes you can swing the legs out and pay a little more up front (that came out SO wrong... lol)
To graph I just used google docs and put in the profit at inflection points and let google fill in the rest. Trying to come up for a formula for a line with angles was hurting my head as it needs to be conditional if X >= $3.50 blah blah blah. Easier just to hand computer a few points quickly and hit up a line (line only needs 2 points for definition).
You're throwing me with all those numbers to be honest... but I get what you say about timing the market. That's not really what I am trying to show, though. I was trying to explain the play and show how others can use it if they wish. Most people are going to have difficulty with basic options let alone spreads... adding timing issues is going to severely complicate the matter.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Jack,
The player doesn't have to be long the stock, but if the player is not long the stock and the stock exceeds 4.50 then this play starts to induce losses. Also the blue line would show half the rate of appreciation between 3.50 and 4.50, yileding only long stock gains in that range, and would decrease at a similar rate afterwards.
Assume Y values of 0 at 3.50 and below, 1 at 4.50. 0 at 5.50, and -1 at 6.50 and you'll get the P+L of play you described. (this is all coming off the top of my head here on the fly at lunch so I may be wrong)
I see ... very little benefit to not just buying the stock here and instead holding aside margin purchasing power to cover the short call position, and thus I made an assumption (which I feel is correct) that the player is long the underlying shares. It's a great play with a nice return.
You can currently do similar with SIRI Jan 2014 3.50 / 4 spread and 4 covered call combo giving a 4.50 return at $4 per share EOY. I may enter this play here myself on my long 2's, 2.50's and 3's, writing 4's against and buying 3.50's with the proceeds.... I need an evening to digest it.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
You're a nut cuz you ride universal frequency waves through the universe. Whenever I read that I picture unicorns and rainbows and shooting stars and an Owl City song playing in the background... :P
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Yes but this will change the P+L. I can update the graph tonight with this instead of holding long but off the top of my head I don't think the curve would be as beneficial at $5.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
No, it is not a bear call spread. It is a combo of a bull call spread and a covered call play. It is a combo of two bullish strategies. The return is 57% at a $.50 to 5.50 share price. You want these shares called away (after which you can buy more with the profits... no shares are precious.. this isn't Lord Of The Rings... ;) )
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Can you show me better returns with similar risk threshhold? Not saying you are incorrect, but I'm curious what offers better returns, is more simple, and presents the same amount of risk as this play currently does.
But you are the guy that says stuff like this :
"No, Faulk, buying stock back is not investing on itself. It is divesting. Whatever, cockeyed brain cells you have need to be lobotomized. "
So I don't really expect much in the way of a response here....
I have an article in queue on a nice options play someone entered into on Friday. Keep an eye out for it if they hopefully publish it tomorrow. You may be interested :)
For that matter watch SIRI 3.49 as well. A return above and hold will signal a break of the short downtrend. I expect both to happen in tandem. Actually GLAD both did not close over today. Too far too fast never a good thing.
So let's just say break of 3.50 and hold gets my 3.75 I've been talking about.
Merrill has always been conservative. Listen to John Tinker. He has a good handle on things. satellite radio playground has various online radio shows you can listen to with him as a guest. Well worth the time to take a listen.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
To graph I just used google docs and put in the profit at inflection points and let google fill in the rest. Trying to come up for a formula for a line with angles was hurting my head as it needs to be conditional if X >= $3.50 blah blah blah. Easier just to hand computer a few points quickly and hit up a line (line only needs 2 points for definition).
You're throwing me with all those numbers to be honest... but I get what you say about timing the market. That's not really what I am trying to show, though. I was trying to explain the play and show how others can use it if they wish. Most people are going to have difficulty with basic options let alone spreads... adding timing issues is going to severely complicate the matter.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
The player doesn't have to be long the stock, but if the player is not long the stock and the stock exceeds 4.50 then this play starts to induce losses. Also the blue line would show half the rate of appreciation between 3.50 and 4.50, yileding only long stock gains in that range, and would decrease at a similar rate afterwards.
Assume Y values of 0 at 3.50 and below, 1 at 4.50. 0 at 5.50, and -1 at 6.50 and you'll get the P+L of play you described. (this is all coming off the top of my head here on the fly at lunch so I may be wrong)
I see ... very little benefit to not just buying the stock here and instead holding aside margin purchasing power to cover the short call position, and thus I made an assumption (which I feel is correct) that the player is long the underlying shares. It's a great play with a nice return.
You can currently do similar with SIRI Jan 2014 3.50 / 4 spread and 4 covered call combo giving a 4.50 return at $4 per share EOY. I may enter this play here myself on my long 2's, 2.50's and 3's, writing 4's against and buying 3.50's with the proceeds.... I need an evening to digest it.
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
Sirius XM: Get $5.50 Return At $4.50 Share Price Using This Play [View article]
But you are the guy that says stuff like this :
"No, Faulk, buying stock back is not investing on itself. It is divesting. Whatever, cockeyed brain cells you have need to be lobotomized. "
So I don't really expect much in the way of a response here....
Sirius XM Has Bottomed [View article]
Sirius XM Has Bottomed [View article]
Sirius XM Has Bottomed [View article]
So let's just say break of 3.50 and hold gets my 3.75 I've been talking about.
Sirius XM Has Bottomed [View article]