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Linn Energy, LLC Message Board

  • ronharv ronharv Apr 3, 2013 11:54 AM Flag

    Options Revisited

    For anyone interested, I sold my April 35 and 36 calls early yesterday when LINE hit a wall at 39. It may yet burst through it this month, but the profit seemed too good to risk after making it in such a short time. But for those who think that LINE will breach 40 by a few points (and I certainly do) between now and mid-January of 2015, you can pick up options with a strike of 35 for about 3.90. That's only about a fifty cent premium off the current PPS, and you'll have nearly two years to expiry. With the Berry acquisition forthcoming I think there's strong cause for optimism. So I added to my position today at 3.90 because the risk/reward ratio seems so attractive. My remaining option positions are the July puts I sold at strikes of 32 and 30.

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    • Hi Ron : )

      I am currently holding 1,841 LINE $36 May 2013 Calls which I bought for 2.40 each yesterday. My goal is to sell them for 3.00 when LINE goes up to $39 per share at the height of its April dividend run up. By the way, Ron, how high do you think LINE will go up in this quarter during its dividend run up? My humble prediction is $39.

      Sentiment: Strong Buy

      • 1 Reply to xionrevolutions
      • Xion, you actually have more than 1,800 calls? That's almost 3/4 of the entire open interest! You must be a walking institution. Isn't liquidity a problem when trying to unload that sizable an amount?

        Anyway, just before reading your post I bought the same calls for 2.25, but any run-up into the distribution is a tough guess. I mean it could run up (if there is a run-up) by the value of the dist., but if the starting point is 37, that'll be nothing to write home about. The best I can venture is crossed fingers, but I hope your prediction is a good one.

2.02-0.11(-5.16%)Nov 27 1:00 PMEST