My play for this week.....MO

MO (Altria) has a huge court ruling coming on Thursday. Some analysts think it may run 10% if the appeal is won by MO. Its $72.50 now, the December 75 calls are .35 or so now. Worth the risk of $350 for 10 calls for a possible large run on the court ruling. Also, you can straddle and get the Dec 70 Puts too for .40. Total would be .70-.75 for the options, stock could run large either way this week. They expire on Friday.

Im a Day trader for a living, specialize in options....

Well dammit the options ran 400% today on the news of the ruling this week.... well, it WAS a good idea....

Now I got some MO shares and sold covered Dec 70 calls. $1.60 premium. 75%+ chance of a favorable ruling. I will take that risk. If MO tanks, I can hold, it will be appealed anyway, and can always sell new calls further out...

[Evan]

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Well dammit the options ran 400% today on the news of the ruling this week.... well, it WAS a good idea....

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You're a full time trader and you didn't see this coming?

I did see this coming, but I did not know the exact date of the decision until yesterday after the close, so too late to get the options then. Been a crazy week for me with other things, so havn't had as much time to research.

[Evan]

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I did see this coming, but I did not know the exact date of the decision until yesterday after the close

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That's my point. Based on the price of the options yesterday and today, I'm guessing no one did.

I know....sure woulda been great to get the spread at .70 yesterday, now like $4. Damn. I think the risk of it going down is low compared to the $1.60 premium still on the Dec 70 calls. I will take a shot. Worst case is MO falls, they appeal, and it comes back up, and I keep the $ from the option sales plus whatever future calls I will sell. Not too worried. $1.60 premium is nice on a couple thousand shares for 3 days if it all works out.

WELL MO Won the reversal, poppped $4. That was nice and easy. $1.80 premium on covered Dec 70 calls yesterday too. Nice... Now for the MO breakup next year.

[Sniper]

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WELL MO Won the reversal, poppped $4. That was nice and easy. $1.80 premium on covered Dec 70 calls yesterday too. Nice... Now for the MO breakup next year.

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I persume you mean the DEC 75s ?

BTW, why did you sell covered calls if you expected the stock to go up??

No, I meant the 70's like i said. I got the stock at 74 and sold the 70s for 5.60 and 5.80. I locked in $1.70 or so profit as long as it held 70. I didnt sell the 75's because of the risk of it falling on the ruling, this gave me more room to be safe. ITs only a 2 day play too, so I wanted a safer return. If I sold the 75s and it fell to 71, i lose. I had a nice cushion here.

I didnt go without the calls for the risk reason, a bad ruling and its down a lot. Id rather lock in a profit instead of getting killed on a fall. At least if it fell i was protected nicely. I had a few uncovered shares, just 500 though. But when I did 3000 shares, I was not going uncovered. Too risky. like banging a hooker without a condom.


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WELL MO Won the reversal, poppped $4. That was nice and easy. $1.80 premium on covered Dec 70 calls yesterday too. Nice... Now for the MO breakup next year.

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I persume you mean the DEC 75s ?

BTW, why did you sell covered calls if you expected the stock to go up??


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