May 22nd, 2011
Step 1: Sell the Put
Chinese Stocks make me nervous, but the return is too good to pass up.
I do not recommend put
ting more than 5% into this position.
Sell to Open CHBT June $5.00 Put @ .60c
(12% return in 25 days)
China-Biotics, Inc. (CHBT) engages in the research, development, production, marketing, and distribution of probiotics
products in the People’s Republic of China. Its products contain live microbial food supplements, which beneficially affect
the host by improving its intestinal microbial balance. The company offers Shining Essence for balancing the microecology
of the digestive system, enhancing intestinal health, and protecting and strengthening liver function; Shining Signal that is
focused on reducing high blood pressure, high blood sugar level, and hyperlipidemia; Shining Golden Shield to enhance the
bodyell as independent sales organizations. The company was formerly known as VeriFone Holdings, Inc. and changed its name to VeriFone
Systems, Inc. in May 2010. The company is headquartered in San Jose, California.
Step 2:If it got Put to you, now we Sell the Covered Call
got “Put” to us @ $36.00
Sell to Open PAAS June 2011 $36.00 Call @ .50c (+1.3% in 25 days)
Running Total (4.3% + 1.3%) = 5.60%
We will be collecting a dividend on this stock this month.
Got Put to us @ $44.00
Sell to Open IDCC June 2011 $45.00 Call @ $1.20
(+2.72% in 25 days)
Running Total (3.29% + 2.72%) = 6.01%
Plus we can make an extra $1.00 per share if it gets called away.
How did we do last Month?
Our $74.00 Put Expired locking in a 3.1% Return
Our $21.00 Put Expired locking in a 4.76% return
Our 18/20 Credit Spread made 13.5%
Our $4.00 Covered Call expired.
I know many of you only got .15c from last mon
ths covered call, so that is the number I will
use in the running total
Sell to Open MELA July 2011 $3.50 Call @ .40c
(+10% in 55 days)
Running Total ($1.20 in Options premium so far = 1.20/4.00 pps (our cost basis) = 30%
Plus this months 10% = 40% return so far.
CAGC is now trading again. @ $3.80
But will be de-listed.
Our best bet is to try to use a LEAP (Long-Term Equity AnticiPation Securities) before that happens.
A LEAP is just a multi-year Option. Sell to Open January 2013 $10.00 Call @ .50c
We are down 83% on this stock.
Our June 2011 $8.00 Covered Call is still cooking.
New Phone number: 888-821-8408
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