Ed S

Possible NYSE Euronext Options Trade

Hi Paul
Thanks for your articles. As an alternative, have you ever considered calendar or diagonal spreads to synthesise a similar result without the downside risk if the stock drops significantly. e.g. in this case buy the Jan'10 $20 put and sell the May'09 $21 put, rolling this position forward.

Advantages of your strategy
- collect dividends
- lower transaction costs
- profit maximised if stock closes anywhere above strike

Advantage of spread strategy
- lower initial capital requirements and downside risk.

I have had some success with the latter strategy ... the cash / cash returns can be quite good eg 75%+ in 9-12 months.

Zinc Producer Horsehead Appears Very Undervalued

ZincOx listed in London, also recycles EAF dust, projects at a different stage of development.

BHP Is Best of the Miners - Barron's

Its a great co, but a short at this price IMO. Outperformance has been massive due to operational performance, low leverage.

But now cum a slew of earnings downgrades due to lower commodity prices.

I think It may trade at $A25 in the next 3 months (about -20% from current levels).

Interactive Brokers: Navigating Turbulent Waters

Its an interesting play and a better business than its peers IMO. The operating margins are phenomenal.

From a customer perspective I see the advantages as low commisions, safety (as pointed out by James Davis, automatic closout is great if you do not want to take a haircut from your broker's risk mangement weaknesses) and the breadth of instruments traded.

Couple of points:
1. like its peers, it will always be de-rated in a meltdown / scare (fears of counterparty risk etc).
2. Extreme volatility (VIX > 50) is negative for these guys (read the conference call transcript).
3. Freefloat of 10% is a negative.

Three Aussie Banks with 10%+ Yields

I believe these entities are all overpriced. Australian residential real estate is not far off its highs, and there can only be more bad news on corporate exposures.