Stocks to Collar
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Created by Barrons
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Date updated:05-26-2007
From Barron's 5-28-07
When Records Prove Elusive.
"Speaking of options, here's a handy strategy with stocks straining at record peaks. "Collars" allow conservative investors to participate in rallies up to a certain target but limit downside risk should the market slide. You accomplish this by selling out-of-the-money calls and using the proceeds to buy protective puts, so collars require little or no out-of-pocket expense."
The following stocks offer great opportunites for collars.
-
AAPL
Apple Inc. - $199.92
- -0.29%
- $198.33
"Take the upwardly mobile Apple (AAPL), for example. With shares near 112.50, selling a 130-strike call that expires January 2009 can generate enough to buy a 110-strike put of similar duration. That allows investors to participate in a rally up to 130 but protects against declines below 110 -- or a potential annualized gain of 17.7% with potential downside of just 0.4% (thanks to a slight credit from the collar)."
-
AMGN
Amgen Inc. - $55.38
- -1.21%
- $55.69
"An Amgen (AMGN) collar, for instance, allows potential gains of 29% versus downside risk of 8%"
-
NEM
Newmont Min Cp (h - $52.26
- -0.76%
- $52.01
"Newmont Mining (NEM) has potential upside of 30% with 9% downside."
-
SPY
S&p Dep Receipts - $109.43
- -0.36%
- $109.25
"With the S&P Depositary Receipts (SPY) near 152, selling 175-strike calls that expire December 2008 will buy 135-strike puts, leaving room for an annualized gain of 10% with 5% downside risk. Here, the upward pricing slant still works in your favor but is less lopsided, since broad-market puts already are in heavier demand."
-
COP
Conocophillips - $52.08
- -0.91%
- $52.28
No Analysis added
-
LTD
Limited Brands In - $17.25
- -2.43%
- $17.60
No Analysis added
-
BEN
Franklin Res Inc - $111.36
- -1.38%
- $112.70
No Analysis added
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Q.
If Goldman Sachs is stupid, what...
11.21.09 | 17:17 PM Asked by
Clementplace
A. Here's another one:
http://seekingalpha.com/article/173986-s
hipping-three-high-risk-high-reward-opti
ons
Also, DSX, for instance moved up after
hours.
It might depend on your timeframe. The
related indexes appear to be trending
up. (this is not a recommendation).
Q.
Steel....playing catch up now. ...
03.24.09 | 11:34 AM Asked by
dgbkr
A. The only one I own : SLX,
too hard pick a winner out all of them
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