ETFC - Buying more
ETFC is getting hammered today - well below $3.
This is a sector thing - all banks, lenders and investment houses are being hammered.
The fear is creating opportunity for us to buy some more.
Buying 1000 ETFC @ $2.47
Writing 10 contracts ETFC Aug 08 $4 for $0.10 each (these are for the ones we have that are now underwater)
Writing 10 contracts ETFC Oct 08 $3 for $0.50 each (these are for the ones we are buying now)
Here's the math
Existing 1000 shares of ETFC have a cost basis ~$3.70. If the option gets exercised, I will net $0.40 or ~11% for 3 months. if not, I have reduced my cost basis further. Again, I feel that the long term viability of this company is strong and I am not eager to leave.
The new shares take advantage of the high premium on ETFC calls.
I write the calls and have lowered my cost basis to ~$2. Meanwhile, if the calls get exercised, I get $1 or 50%.
This is a sector thing - all banks, lenders and investment houses are being hammered.
The fear is creating opportunity for us to buy some more.
Buying 1000 ETFC @ $2.47
Writing 10 contracts ETFC Aug 08 $4 for $0.10 each (these are for the ones we have that are now underwater)
Writing 10 contracts ETFC Oct 08 $3 for $0.50 each (these are for the ones we are buying now)
Here's the math
Existing 1000 shares of ETFC have a cost basis ~$3.70. If the option gets exercised, I will net $0.40 or ~11% for 3 months. if not, I have reduced my cost basis further. Again, I feel that the long term viability of this company is strong and I am not eager to leave.
The new shares take advantage of the high premium on ETFC calls.
I write the calls and have lowered my cost basis to ~$2. Meanwhile, if the calls get exercised, I get $1 or 50%.
posted by Andrew at
11:11 AM
1 Comments:
Dear Andrew,
What is your opinion on the VMC for declaring dividend recently ? I think this is a positive action for them. At least, they implies that they are not that bad.
Any idea ? Should we exit our put ?
thanks
yours faithful follower.
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