I think RIMM continues up until the end of this earnings cycle. When companies finish reporting I'm going to buy Jan 09 puts. I'm thinking the Jan (09)100 puts. Interested in serious responses. RIMM will definitely have at least one 20% correction in the next year and very likely even more than that after APPLE starts to eat into the Blackberry.? ANY one agree with my logic?
Now if you have a conviction that RIMM will do well for the near future but you are looking for a future correction, there is a way to take a little sting out of the cost of the position.
This would be a calendar spread. You would be short let's say a Jan(08) 100 put @ $7.30. This would take a bite out of the $17.40 cost for a Jan (09) 100 put.
This position will increase in value as time goes by if RIMM is flat. If RIMM is at $100, then this position is the most profitable ATM is the goal for Calendars.
If RIMM keeps sailing up, at least you took a $7.30 chunk out of your cost. After the Jan (08) expires, you have a net position cost of around $10.10.
Heres the catch.....This will become less profitable with increasing IV and also if RIMM where to drop you wouldn't catch it because your short call is going to travel at a similar delta as your long call.
However, if you truely think that RIMM will rise or stay in the current pps and then fall at a future time, this would be a play around your conviction.
The other play would be not to execute your position for several months.
I think you should take market into consideration too--buy puts when either the market seems overextended or its reaching a critical level--i ve never traded options (not significantly) so I cant comment on the premium and tiem decay--I d rather short the stock itself with a proper stop. I was looking at GOOG nov 630 calls and they were going for about $25 when stock awas at 614 --kinda seems ridiculous to me but again I dont know anything about options--sure it allows u to control a bigger stake but you are fighting time too--just be careful is all I can say and adhere to your stop--and there s no guarantees in the stock market but ony ahoo boards there is a guarantee--even when u put "serious question-serious replies only" some idiot always replies LOL--good luck with RIMM