$1.70 Premium with 3 days to go

Discussion in 'Options' started by Arnie Guitar, Dec 13, 2005.

  1. Jesus, I'm outta cash, but MO Dec 70 Call has a $1.70 Premium with 3 days to go.

    I know there never is, but this is the closest thing to a sure thing ITM Covered Call Write I've ever seen.
  2. Don't they have a court ruling coming out this week?
  3. I believe something is happening Thursday, newswise.

    It goes ex div (.80) on the 23rd.
  4. Pretty risky if the ruling is against MO. I mean the put is up $1.30 on the risk -- and the underlying is up $.70 on the day.
  5. Holy Crap, the Dec 65 Puts, almost 10 points, and over 12 % away, are at .60.

    I'd sell as many naked puts as I could.

    I'll go out on a limb here...........,

    There is NO WAY MO is goin to 65 by this Friday.

    Of course, I have been wrong before. :( :( :(
  6. Maybe that's why, as you so eloquently put it, you are "out of cash"
  7. I mean I am committed to other positions.

    I wish I could follow that "Keep some powder dry" advice.........

    So, excuse my ignorance, but generally speaking,
    for every naked MO Dec 65 put you sold, you would have to have
    how much on deposit with your broker?

    If your broker's margin requirement was, let's say, 50%,
    half of 6500 is 3250, so you'd have to have 3250 in cash on deposit for every contract sold, right?
  8. First to answer Arnie's question, because I'm a helpful kind of guy:

    Exchange minimum margins are: 20% of underlying - out of the money amout/ or 10% of underlying price, whichever is higher+ (option price): So $740 + $60= <b>$800</b> required for every MO DEC 65 put sold.

    Many brokers require 25% of underlying price, instead of 20%, because they are assholes. With them you'd need ($1851)- ($903) + ($60)= <b>$1,008</b> on deposit for every MO DEC 65 put sold.
  9. Now my question:

    <b>What time is the verdict supposed to be announced?

    The 5 articles I scanned for this information apparently didn't deem it important enough to mention.
  10. The last case came out at 10:30 am I believe. I don't know about this case though.
    #10     Dec 13, 2005