I prefer to drink Coke, but think Pepsi might be a better investment. Everyone knows about Pepsi so I'm not going to say much about it. Here is the buy-write:
Buy 100 PEP @ 63.94: ($6,394)
Sell 1 Jan 13 62.5 call @ 6.54 654
Sell 1 Jan 13 65 put @ 8.00 800
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Total outlay: ($4,944)
Potential return: $1,158 plus any dividends collected over the next 18+months. After dividends, the return is around 30% on a stock that doesn't have to go up at all from todays price.
Break-even on the trade is 57.22 or about 10% below current prices.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Saturday, March 26, 2011
Free webinar discussing selling options
Dr. Paul Price over at BeatingBuffett.com is offering a free webinar on selling options and how he picks stocks to sell options on. I suggest you listen to it if you want to learn more about the buy-write strategy as he has mastered it and knows what he is talking about. Below is the link.
http://www.beatingbuffett.com/?p=3334
Click the green "CLICK HERE FOR WEBINAR REPLAY" about halfway down the post.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
http://www.beatingbuffett.com/?p=3334
Click the green "CLICK HERE FOR WEBINAR REPLAY" about halfway down the post.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.