Prosper Newsletter: April 2006 > Stock
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
Homeruns In Stock Come From Moving Base To Base With Trades!!!
Once again, I've been very happy with my CC trades. You asked me to share BRCM with you. On or about Jan 13, '06, I was watching Brcm, which had broken through resistance and had been trading in the $59 range. With a week until Jan. expiration, the stock had dipped and I caught it at $56.30. I then sold the Jan $57.50 for .60 thinking that if I get called out I'll make 3.2% in a week and it I don't I can sell a Feb call. I didn't get called out and ended up selling the Feb 60 call for $2.10. As you know earnings were a positive surprise and the stock shot up to $70. I had looked several times at rolling my option up to $65 or even $70, but of course, I then would have lost on the option (as well as sleep) and had to rely on the stock to hold its price. As it stands, I should get called out at $60. I add the trade up like this. Collected .60 for Jan and 2.10 for Feb plus 37 if I get called out for a total of 6.4 divided by 56.3 for an 11.367% gain in 5 weeks. Remember, I'm not looking for homeruns, but as long as I keep getting on base I should be able to put some points on the board!
Thanks,
-Richard T.
Diamond Bar, CA
The earnings reports are rapidly building and for the most part they are very good. However, the first day after Easter we see the market dropping dramatically. The main culprit is Oil. A barrel of oil has exceeded $70 and it may go higher. This impacts the overall indexes but the energy and metals sectors are continuing to climb. To follow the prices of oil, gas and distillates you can go to www.nymex.com or www.oil.com for more information. The volatility of commodities will continue so long as we cannot meet demand. Trades on energy stocks and metals is the order of the day.
