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Using a covered write strategy with a target of 10.50
Short 800 SOHU Common@xxxxx, Short 8 Apr7.5 Puts@xxx
or
Short 40 Apr7.5 Puts@xxx
--- In Metastockusers@xxxxxxxxxxxxxxx, <uhehs@xxxx> wrote:
> I am considering an option strategy and would like some
> opinions/comments/suggestions.
>
> First, the stock: SOHU. I have a short trigger set at
$11.60. At which
> point I would normally short 2,000 shares.
>
>
> I'm thinking about buying 20 May 12.5 Put contracts, for what
would be
> $5,100 cash outlay [I'm using the Ask of $2.55]
> I'm also thinking about writing 20 May 12.5 Call contracts, for
what would
> be $3,300 of income. [Assuming $1.65 asking price]
> For a total outlay of only $1,800. To control 4,000 shares of
stock!
>
> At the same time, the June contracts would be a total cash outlay
of $1,700.
>
> Does anyone do this type of thing already?
> Any choice over which month to go with?
>
> Thanks for any opinions/comments/suggestions; Hope it gets
everyone
> thinking.
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