By the way, I really appreciate all the feedbacks and discussuions. It shows that we don't see things the same and that is wonderful.
With big risk (20,000 dollars a point). I was short Jan12 12.5 puts when the stock was hovering around 13. But at 16 I don't think the risk reward favors puts. If Jerry Yang does some stupid this stock can be 12 real fast. Also, 43 cents isn't 17% return. It's closer to 3%.
Every contract costs me $250 in cash so with 2500, I can trade 10 contracts and get $430. So if the trade goes in my favor, I will make $430 minus about $8 commission. Rate of return = [$430-$8]/ 2500=16.88 %
By the way YHOO is not the one month ago's YHOO. YHOO beat the 17 cents estimate by 6 cents. The earning was 23 cents per share with a better outlook. Even with no buyout possibility, it deserved 30% pop just because of good earnings.
I would not be calculating your return based on your margin requirements. Firstly those requirements change. Secondly, it doesn't represent your real risk. You should be comparing your return to the real capital at risk (which is 14.6/share). 3%. It's not a bad return, but a more honest number.