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Bank of America Corporation Message Board

  • eureka201112 eureka201112 Nov 3, 2011 12:17 AM Flag

    12.3% nominal return on Feb. 2-strike naked puts


    Reposted from my home board of PFE:

    With 15.4 weeks remaining until expiration, the Feb. 2-strike naked puts for BAC are quoted at $8 bid, $9 asked. If sold at bid, each contract after commissions would fetch about $7.25 with the cash requirements at my brokerage being $59 per contract.

    The nominal return for this investment is 12.3% for the 15.4-week holding period. That's an out-of-this-world return given that to earn it, the $6.72 stock has to merely close above TWO bucks in three-and-a-half months.

    What other bullish investment could you possibly invest in that would give you such a return even if the stock crashed by SEVENTY percent?

    By the way, who else but me do you see on these boards informing and educating investors as to such an incredible opportunity with virtually no risk other than end-of-the-world scenarios.

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11.95+0.79(+7.08%)Feb 12 4:00 PMEST