If you buy the current shares at 9.40 and write the calls at 2.10/contract, you'll get .20 in intrinsic time value-- which is an excellent return for 1 month. For every 10 contracts you write, you'll earn 200 dollars. Besides, BEBE's chances of testing 7.50/share after its recent earnings report is very slim. Take a look.
FBR analyst Adrienne Tennant said on May 8 that Bebe posted a third-quarter pro forma loss per share of $0.04, vs. Wall Street's $0.08 loss forecast. She said channel checks show the cleanest levels of inventory she's seen in Bebe stores in several quarters; she believes this position will allow the company to maintain
its minimal promotion stance relative to peers, and mitigate markdown pressure. She believes the return to the helm of CEO Manny Mashouf (in January, 2009) after a five-year hiatus is being positively felt.
The analyst raised her $0.14 fiscal 2009 (June) EPS estimate to $0.19, and her $0.15 fiscal 2010 forecast to $0.19. She has a $10 price target on the stock.