[at-l] 800 dollar thru hike

[Tom McGinnis]

Thee Clyde:
November calls on Ford for $3 are going for 35¢ per Friday close. If you sold calls on your Ford stock, and on the third week of November, Ford was at $2.99, you keep your stock, AND you're ahead the 35 centavos. If Ford is $3.01 or better, your stock is sold at $3.00 (a considerable profit to you) AND you're ahead the 35 centavos. If FORD plunges to $1.10, well hell, at least you cut the losses by, guess how much, that's right, 35 centavos. You can even get *in* on the stock at a discount, by selling put a put contract (November Ford puts are selling for $1.00 -- that's just phreakin' phat.)

If you repeat the steps above, raising up your call target as your expectations grow, you can subtract anywheres from 15¢ to 75¢ per month from your cost basis in Ford, taking it from the initial $1.88 to perhaps zero. And yes, this speeds your re-entry to hikerdom.

Roughly a year ago, I jumped on AMD in a similar way, at a basis of $8; it is now at $4.21. Yes, I am sad. Howsomeever, not as sad as I might be. I sold calls on for 9¢, 75¢, 43¢, $1.07, and 75¢, so my basis is down to $4.91. If AMD pops to $7-$10 (as I think it can -- it just reported quarterly results, with a paper loss, but earnings of 11¢ on ordinary activity), I will be a happy boy. As it is, with the stock down almost 50%, I'm down ~10%.

If you're going to buy-n-hold a stock, sell some calls on it; hike sooner. Options give you.... options.

tradertoe

--- On Fri, 10/17/08, rcli4 at comcast.net <rcli4 at comcast.net> wrote:

> Close today...
> 
> 425 X 2.43 = 1032.75      4200-1032.75 = 3167.25 to go
> 
> Clyde
> -------------- Original message -------------- 
> From: rcli4 at comcast.net 
> 
> On Oct 10, 2008 in the amidst of the chaos on wall street I
> was thinking.  I took 800 dollars and bought 425 shares of
> ford. 425 X 1.88 = 799.00  Scottrade will charge me 7 bucks
> so really I have 806.00 in my stock.  According to my
> crystal ball, in the next 12 months the stock will climb
> back to normal prices.  When it reaches 9.88, Wahlah!!!! I
> will have $4,200.00 for a thru hike.  Stand by for updates.
> 
> Clyde
> PS I know Felix it only cost me a round trip ticket to
> Maine and 3 days food for my hikes, but you get my
> point._______________________________________________
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