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Linn Energy, LLC (LINE) Message Board

  • bluedreamdreamer bluedreamdreamer Jun 17, 2013 2:12 PM Flag

    21% annualized "yield" on LINE...

    ...from selling jan 2014 28 puts for 3.50. Option premiums are really high , the "LINE VIX" is sky high , with OTM puts yielding over double the yield of buying shares

    LINE it technically at at the lower channel of its 2 SD linear regression curve on the daily year chart, that is the technical point i like to buy shares, which I also did. Multiple insider buying also telling

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    • I thought about selling more puts on Friday but stayed away for fear Barrons' would do another hatchet job on us over the weekend. Definitely agree with your thinking.

    • I agree, there is a lot of money to be made writing puts on LINE. Friday the premiums were even higher, but today is great too. I'm shorting the July 30 and 32s. I prefer closer expiration, theta is higher and I can either let them expire worthless or roll them to a further month. It's a win-win situation. Good luck to all longs.


      • 2 Replies to igsteri
      • this is great you all are complaining about hedgeye shorting/ Yet you guys are playing puts and shorting as well. You can't complain if you are doing the same as the others. yet you beetch about the stock being raided. To fn funny.

      • my read of the weekly chart is support if now at the 2010 lows support around 24, so I am more comfortable selling 28 puts with a put-to basis in the 24's, is my rationale. but i agree selling short term options will harvest time-decay of premioum quicker than long dated options. however, if shares bounce you will not yield as much over time by rolling forward those july 30's

        regardless , the added yield by selling options versus just buying shares and holding for the distribution for the same period is higher than i've caught for LINE over the last couple years

        if shares bounce, the "fear factor" currently driving the high premiums in LINE options likely will fall significantly, so calls may not appreciate as much as one might expect so I am not buying calls. indeed, I sold some July 31 calls on the shares i bought today, again to harvest the high premiums of selling options

        elevated premiums what happens to "battleground" stocks under attack from shorts- there is a lot of (perceived, anyway) risk to the downside, especially now that LINE has solidly broken below its recent trading range

        Short interest of 10.7 m shares as of last report 5/31 higher than any time in last year, shorts are definitely winning the war but LINE is very oversold technically on daily, weekly, even to an extent monthly charts, a bounce or consolidation (possibility of which also why i am not buying calls) is in order IMO

        previous support just under 35 is liable to be resistance now going forward for the medium term though,

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