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Hedged Stock Replacement
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I am a former Money Manager who now operates a website which partakes in outsourced investment strategy. We specialize in non- speculative Stock replacement strategies which utilize Option Spreads. USMC, MBA.
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Hedged Stock Replacement, LLC
  • MS Stock Replacement Example 0 comments
    Mar 12, 2013 1:32 AM | about stocks: MS

    MS Current Price $23.03 (April Expiration)

    Buy 23 Call - $1.04

    Sell 24 Call - $.58

    Sell 22 Put - $.60

    a) You will be paid $.14 to initiate this spread

    b) You can participate in the upside from $23-24 (+) $.14 received = $24.14

    c) You will not experience a loss in this trade unless MS falls below $22(+) $.14 received = $21.86

    d) This method will still profit $.14 even if the shares fall to $22.01, whereas owning the stock will produce a loss from $23.03 all the way down to that point.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Options Strategy Stocks: MS
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