07-25-2002, 06:54 PM
This is the trade.CPN is the stock.If you like
to gamble just buy the stock outright.It will be
over 10 perhaps 15 in two years.They will net
1.44 per share this year according to analysts.I believe the number will be closer to 1.20. CPN closed at 4.05 today up .25 Here is the boring but easy money trade.They have a good product.They sell electricity.They own over a trillion cubic feet of gas and they have the most modern gas burning turbines on the planet.They are actually endorsed by the Sierra Club.They own
Geothermal wells also.They have been audited twice in the last few months and are clean as a whistle.
Buy 1 Jan2004 7.50 put 5.20
Sell 2 Jan2004 5.00 puts at 3.10 or better
You collect 100.00 per spread.
Margin is at most 250.00 but the most you can lose on the trade is 150.00
Here is how it works.
At expiry if CPN is over 7.50 you collect the credit of 100.00
at 7.00 you make 150.00
at 6.00 250.00
at 5.00 350.00
at 4.00 250.00
at 3.00 150.00
at 2.00 50.00
Worst case you are long 100 shares for each spread at 1.50
These are some other possibilities.CPN is a takeover candidate and the stock rallies sharply,
you reverse your ratio backspreads for a credit.
Your return on risked money will be over 100%
I took all the money I had in CD's and put them in these trades.
BTW I have been selling every rally in the S&P futures since March.Still room on the downside
but this trade is a must do.
to gamble just buy the stock outright.It will be
over 10 perhaps 15 in two years.They will net
1.44 per share this year according to analysts.I believe the number will be closer to 1.20. CPN closed at 4.05 today up .25 Here is the boring but easy money trade.They have a good product.They sell electricity.They own over a trillion cubic feet of gas and they have the most modern gas burning turbines on the planet.They are actually endorsed by the Sierra Club.They own
Geothermal wells also.They have been audited twice in the last few months and are clean as a whistle.
Buy 1 Jan2004 7.50 put 5.20
Sell 2 Jan2004 5.00 puts at 3.10 or better
You collect 100.00 per spread.
Margin is at most 250.00 but the most you can lose on the trade is 150.00
Here is how it works.
At expiry if CPN is over 7.50 you collect the credit of 100.00
at 7.00 you make 150.00
at 6.00 250.00
at 5.00 350.00
at 4.00 250.00
at 3.00 150.00
at 2.00 50.00
Worst case you are long 100 shares for each spread at 1.50
These are some other possibilities.CPN is a takeover candidate and the stock rallies sharply,
you reverse your ratio backspreads for a credit.
Your return on risked money will be over 100%
I took all the money I had in CD's and put them in these trades.
BTW I have been selling every rally in the S&P futures since March.Still room on the downside
but this trade is a must do.