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Pfizer Inc. Message Board

  • chrttwelve chrttwelve May 3, 2011 12:14 PM Flag

    Remarkable return on this naked put play

    With the GE ($20.58) Jan. 15 naked puts currently quoted at $39 bid, $40 asked, the return is a full 20.0% for 37.8 weeks or 27.6% annualized. As long as the stock holds $16.75, that is the LEAST you can get. And if the stock doesn't tank, you likely would get at least a few percentage points more.

    If the stock falls below $16.75 and a rollout is needed to the 12.50's for Jan. 2013, there would be margin safety down to $14 and a high-teens return if that price held.

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    • I will continue in all my future posts.

      Blah, blah, blah, blub, blub, blub...

      Still underwater & going down (on Ruffnuts) for the third time!

    • Here is an excerpt from your post:

      Retirees are those people who did well enough in their work life and investing times to just sit back and live off of the results.

      I really don't know many people like that. Most retirees that I know are people that simply stopped working because they turned 62, 65 or 70 or conversely had to stop working earlier for health reasons.

      Most of them are NOT set for life at all but simply don't work any longer because of age, health or both.

      I'm part of the minority who IS set for life.

      My main goal now is NOT to just pile up the wealth per se but to teach other seniors what I know so that they can safely earn 15% and up annually instead of just 2% or 3% in CD's, annuities and such.

      I feel that this is now my calling and after almost a decade of being retired and even though I hardly need the money, I'm going to come out of retirement. Either I'll go after my MBA degree (which could easily COST me 50K or more) or I'll go for a brokerage license or both. I then want to write a book on options and I want to speak at investment seminars about my way of investing in naked puts.

    • What kind of book have you written? Instructions on how to slide imaginary beers down imaginary bar counters?

    • Here is an excerpt from your post:

      This is virtually risk free. Unless the market totally tanks. In that case, the reader is now worse off than had they bought and held a stock.

      That last sentence is WAY off the mark. Because there is a limit as to just how much I'll allow the stock to go down before I simply get out.

      In my opinion, if PFE were to start going materially below even the low point seen during the crash, there would have to be some serious existential threat. Like perhaps analysts mentioning seriously that perhaps the government wouldn't deal with Pfizer any longer because of repeated Medicare fraud or false marketing, etc.

      While not at all likely, that sort of thing is possible and if gets more and more possible and the stock were to tank to say the low 11's, I'd simply want out - no more questions asked.

      And the fact is that even in a relative panic, it's just not going to cost me an arm and a leg to get out of rolled-down 10-strike naked puts with the stock at around $11.20. Yes - maybel I'd have to pay 12K to get out of options I had received a total of 8K for but that's still just a 4K loss on a 20K initial investment or 20%. And that percentage is FAR less than a buy-and-hold investor at $20 would have with the stock at $11.20.

      So even if the stock really tanks, I am STILL going to do far better than a buy-and-hold investor.

      There just seems to be no downside with this strategy. And that's why I continue to carry on the way I do about it.

    • Thanks for your public spirited effort.

      I hope everyone else follows your meritorious lead.

    • What a surprise. I'm positively shocked!

    • I, for one, have reported this illegal activity to Yahoo.

    • Once you've gone Squid, you never go back (unlike my verbal & numerical genius im-posters on this board, I can't think of anything meaningful to rhyme with "squid".)

    • ilaughatallthewrongjokes ilaughatallthewrongjokes May 4, 2011 6:16 PM Flag

      I think I want to buy 'your' book!!


    • With my subhuman powers of obfuscation, I WILL easily turn a short article into a long book, by blatant buffoonish bloviating blowhard puffery, effusive own horn tooting lies & assorted offtopic drivels, that is, my patented stock in trade!

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