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Wednesday, June 10, 2009

33% of the way there


Thirty Three percent of the time involved in the current trade is gone. There are now only 25 days remaining until the call expires. The stock continues to be over the strike price. There has been some more positive press in regards to the company's products which should keep the stock at a high level.

There was an analyst that moved the company's recommendation from hold to sell during the week. It happened after the run up earlier in the week. The analyst seemed motivated to reiterate his thinking on the stock because it has started to get away from him. The crazy thing about this recommendation is that the analyst feels that if a certain product test fails, the stock could lose about 60% from today's levels. The analyst also writes that if the test goes well, the stock could move upside of 350%.

The option currently has a time value ratio (time value/option price) of 57%. It was 100% when the option was sold.

Because the stock is above the strike price, the call could get called out. The fact that it could happen at any time is neat. It's almost like Christmas waiting for an email from Optionsxpress telling me that the call has been exercised.

As always, I do not fully divulge information on open trades. When the trade ends, I will give out the rest of the details (stock name, price purchased, call purchased, news on company/ETF, chart info) that sort of thing. Please feel free to ask questions and I will answer them the best I can without endangering the trade.

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