Mon, Dec 29, 2014, 12:09 AM EST - U.S. Markets open in 9 hrs 21 mins

Recent

% | $
Quotes you view appear here for quick access.

Electronic Arts Inc. (ERTS) Message Board

  • f7fighter f7fighter Feb 20, 2007 9:55 PM Flag

    It's a buy .

    Look I'm in so it's a buy put the hook in at 50.87 it executed. stop in at 50.99 gauranteed profit. 65 is a shoe in with patience. I will be selling at 64 and buying back at 62.75 then selling at 67. Breath in and breath out. all the way to 75. The trend will be up from now on, and if not o'well I am covered thanks to todays action.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Here's another benefit to the married trade:
      Even at the bid price at the end of the day yesterday you could sell the put back and double your investment (the put investment) by selling those puts for 4.30 (part of the reason your getting a double in value is because of the increased volatility otherwise they would probably be closer to $4.10-4.20. You can then repeat the trade when the stock is at 53-54 again in a week or two.

      Alternatively you can just forget about the married trade and wait for expiration to come while starting a brand new position with a purchase in the 49-50 range. Ok, I'll pause right here to allow the ultra bears to yell about how you shouldn't buy until it's in the 44-46 range. While I absolutely agree with the point that you'll have a better return if you buy it at 44-46 the real thing to keep in mind is the word "IF".

      Since NOBODY can call the tops and bottoms you need to do what I always say in regard to buying/selling positions...AVERAGE IN at a fair price. If you buy at 49.50 and get the opportunity to buy more at 46.50 you now own it at 48. Maybe you get another buy at 45-46 but maybe not. The point is that if you wait your likely to "just keep waiting" and never buy (until it's back up to 53 and your saying "why didn't I buy some at 50?".

      Like I've said before I have a full position so I can't buy any more but I will be buying back some of the covered calls I sold last Friday. I still have my ticket in to sell those Jan09' puts for $14 but I need more downside help to a 47 handle to get a fill on those and I doubt I'll get it. Maybe some of the Bears in here will buy them from me if it gets to that level though. By the way, I'll be buying some shorter term (Probably Jun 45 puts for around $1.75) to hedge the position (that should sit well with my friend Take2d2).

      Good investing to all!!!

    • First off I am not all that good at tax or tax law so you should confirm this.

      If you marry the put to already held shares (instead of buying them both at the same) and those shares are not already long term, your holding period gets reset and stays reset for as long as you hold the puts. If they are already held long term then nothing will change that they are long term.

      1-1-07 to 12-1-08 is long term (nearly 2 years)

      If you meant to say 12-1-07 then your holding period would start when the puts are sold, expired, or exercised. This is so you can't trick the IRS into a long term position. If the puts expire worthless you book that as a short term loss and the holding period of the shares starts from the expiration date.

      I think its a good strategy for volatile stocks when their price is near a strike and there is not much time value on the put - then you aren't gonna lose much and it doesn't need to go up much to hit the break even point.

    • Thanks for the 5 star reply. Sounds like a good strategy. Just to make sure I'm following you correctly is the following quick example correct?:

      I buy a stock for $10 on 1-1-07. On 12-1-08 I buy a Jan 08' $12.5 married put for $1 and hold to expiration (3rd Friday) with stock at $12.60 so I get assigned.

      If I'm following you I would add the $1 to my $10 basis OR subtract it from my $12.50 sale price to end up with a $1.50 profit. My hldg period would be 1-1-07 to 12-1-08 (short term) rather than 1-1-07 to 1-18-08 (long term).

      If the stock closes at $13 the put expires worthless. I think the correct procedure in this case is to just deduct the $1 loss against my gains for the year as opposed to subtracting it from my profit when I eventually sell the stock.

      Is that correct? Thanks again for sharing your knowledge. I probably could just look in up the 550 but the question just started flowing off my fingers. You probably know the answer without even thinking about it.

    • The .9% was the risk not the locked in profit. With your numbers it would be about .7% for the .34 of 53.19
      Your numbers look correct we just used different ones.

      Yes it cuts into potential profit until the break even point but we were talking about locking in gains. Im sure some people wish they did today :)

      This type of hedge is called a married put. The way you calculate your risk/max loss is: share price - strike price + option price. So if the stock is 50 and a 55 put costs 6 your risk would be 1 (50 - 55 + 6). If you already have some profit (meaning you didn't buy the put and shares together) then your 'locked in' profit is: current profit - risk.

      My reference to the IRS was that you can't do this to turn a short term holding period into a long term one.

    • PLEASE DISREGARD PREVIOUS POST, THIS IS THE CORRECT POST. THANK YOU.
      >>how about a hedge? Say.. buying EZQOK ERTS 55 Mar07 PUT to match the shares you hold? Then you would have any current profit greater than 0.9% 'locked in' and would not gain anymore profit until above 55.48 (+4.23%). The risk is the chance you will lose the 0.9%.

      Its buying insurance to insure profit... although you could consider that 'physically selling'. The IRS does.<<

      First let me say I really appreciate you and flyer giving us different thoughts and ideas to think about. The message boards can be a great place to not only "talk up/down" a stock but also to (more importantly) share knowledge. Now to my questions.

      Can you please elaborate on your numbers. I don't see how you got your .9% or 4.23% based on the Put prices as of the 2/23 close that you must have been using on 2/25. I believe the 2/23 price was $2.15.

      All based on 2/23 CLOSE:
      So if he bought it at 50.87 he has a $2.32 profit with the stock is at 53.19.
      Now he buys the ERTS 55 Mar07 PUT for a cost of $2.15

      If at the option expiration he gets rid of his stock and the stock is at:

      or BELOW 55 the put exercises and he sells for 55 so he made (55-50.87 =4.13) - 2.15 =$1.98 which is less than the $2.32 he had in the first place. I come up with a 'locked in' profit of 1.98/50.87 which is 3.9% not .9% (can you please explain your .9% figure?). Also, I get a 'lost' profit that is .34/2.32 = 14.7% less of a profit than he had previously. and a 2.15/4.13 = 52.1% less of a profit if the stock is at 55 at expiration. Either way it cuts into his potential profit by approximately 15%-52%. Do I have these numbers correct?

      By my calculations, at the 55.48 price you mentioned he would have 55.48 � 50.89 = 4.59 � 2.15 = 2.44 which is above his original profit not just the point he has to get to in order to �start� having a greater profit. My calculations come up with him making �more� than his original profit as soon as the stock is above $55.34 which is 4.04% above the price when the option was sold not the 55.48 / 4.23% you referenced. Can you explain where I got it wrong?

      As to the IRS, don�t you just use the expiration date as your sale date and add the put cost to your basis. Since you seem to trade them a lot could you give a simple 1-2 sentence description of the correct handling if I am wrong about adding to the basis? Thanks

    • >>how about a hedge? Say.. buying EZQOK ERTS 55 Mar07 PUT to match the shares you hold? Then you would have any current profit greater than 0.9% 'locked in' and would not gain anymore profit until above 55.48 (+4.23%). The risk is the chance you will lose the 0.9%.

      Its buying insurance to insure profit... although you could consider that 'physically selling'. The IRS does.<<

      First let me say I really appreciate you and flyer giving us different thoughts and ideas to think about. The message boards can be a great place to not only "talk up/down" a stock but also to (more importantly) share knowledge. Now to my questions.

      Can you please elaborate on your numbers. I don't see how you got your .9% or 4.23% based on the Put prices as of the 2/23 close that you must have been using on 2/25. I believe the 2/23 price was $2.15.

      All based on 2/23 CLOSE:
      So if he bought it at 50.87 he has a $2.32 profit with the stock is at 53.19.
      Now he buys the ERTS 55 Mar07 PUT for a cost of $2.15

      If at the option expiration he gets rid of his stock and the stock is at:

      or BELOW 55 the put exercises and he sells for 55 so he made (55-50.87 =4.13) - 2.15 =$1.98 which is less than the $2.32 he had in the first place. I come up with a 'locked in' profit of 1.98/50.87 which is 3.9% not .9% (can you please explain your .9% figure?). Also, I get a 'lost' profit that is .34/2.32 = 14.7% less of a profit than he had previously. and a 2.15/4.13 = 52.1% less of a profit if the stock is at 55 at expiration. Either way it cuts into his potential profit by approximately 15%-52%. Do I have these numbers correct?

      As to the IRS, don�t you just use the expiration date as your sale date and add the put cost to your basis. Since you seem to trade them a lot could you give a simple 1-2 sentence description of the correct handling if I am wrong about adding to the basis? Thanks

    • how about a hedge? Say.. buying EZQOK ERTS 55 Mar07 PUT to match the shares you hold? Then you would have any current profit greater than 0.9% 'locked in' and would not gain anymore profit until above 55.48 (+4.23%). The risk is the chance you will lose the 0.9%.

      Its buying insurance to insure profit... although you could consider that 'physically selling'. The IRS does.

    • New to board. Renewed my interest in PHI LO SOPHY? The last time was college LOL.

    • Ok, that was SERIOUSLY funny.. You forgot Britney Spears being elected to the presidency after buying the rehab center she keeps going in and out of.


      >>And based on inflation as it is in todays reality if it closed at $44 you would be under water. <<

      Touch�. That's an indisputable point of fact that I totally neglected. I'm covering everything tomorrow.

      Nice post, seriously.

      Good investing to all!!

    • <<Actually, let�s make it easier on you by saying you would just need to explain why, in JAN 2009, it WILL NOT be above $44 (my break even point if we assume no hedging position and the trade is held to maturity).>>

      Competition from VG sector heats up and steals the thunder from the 400 lb. gorilla as wall street sinks into a slump caused by oil and housing concerns as WWIII breaks out in the Middle East with nuclear tipped missles flying both directions as news breaks that they have cloned Anna Nicole Smith.

      And based on inflation as it is in todays reality if it closed at $44 you would be under water.

    • View More Messages
 
EA
48.33+0.27(+0.56%)Dec 26 4:00 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.