Monday, April 16, 2012

AN ACORN FOR THE BLIND PIG:

Sometimes you get the Bear - sometimes he gets you. Occasionally, being human, we make mistakes - hopefully small ones. Once in a great while it gets reciprocated. My latest trade, on CLF (Cliffs Resources) showed a huge Call premium for the Oct.option. Although it doesn't go ex-D for another week I jumped in - estimated annual return (unless Coal falls off a "Cliff") - 70%!!! with a 6-month position. I did a second order which they corrected (45% annualized) in another account, but now I see the original quote on the Oct.$62.50 is back. What's wrong with this picture? 65 Delta, 47 IV.
I usually stay away from "Hot" issues - coal has been much in the news lately- but the safety net is huge.

No comments:

Post a Comment