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Chesapeake Energy Corporation Message Board

  • alwaysaclipperguy alwaysaclipperguy May 23, 2008 12:34 PM Flag

    January 60 calls

    I own Jan 60 calls I bought when CHK was around $58. What do those of you who are knowledgable about options think I should proceed? Should I cut my losses or wait for a rally?

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    • People are just scared of the current offering and afraid of the dilution potential. Thing is, it converts at $85.89.

      I like the Jan 2009 $60s. At $4.60, I think this could go to $70 by expiration and result in an easy double. Check out prices for the rest of the calendar year of 2008. PRICES ARE WAY UP FROM OUR EXISTING HEDGES. Which means revenues should be above estimates. 2010 revenues could be double 2008 and at larger margins.

      My Jan 2010 $70s, which I picked up at $2.70, have fallen by 30% in the past week. It takes a stomach.

      Detach yourself man. You made the right move. let it play out.

    • There is a lot of demand for NG. I can't imagine that these stocks would crash. This seems like an orderly profit taking. Longer term, these stocks move with NG prices.

    • I have July 60 Calls that I'm down big on, but at all worried. Eight weeks to expiration.

      I don't necessarily expect $60 at end of July, but I think we'll trade above $58 - mostly likely by end of June - which will put me positive, even if still technically "out of the money."

      January options likely work well with this and other NG stocks as everyone gets paranoid about NG supplies being to low starting around October or so. It will be a concern earlier if their are big storms in the Gulf this year.

    • Since you have plenty of time on those calls, aren't you basically asking if CHK has seen it high until after Jan 2009? IMO, it has not!!!! I have some Jan 2009 calls and have no inkling to sell...

    • I'm in a similar situation. I have Jan 75 calls but for 2010. I'm going just hold onto mine since I got all this time. I bought in when the stock was at 56.

      Selling now would be panicking. That doesn't make sense unless the fundamentals have changed or the longer outlook on nat gas has changed. I would just hold onto them, but I would like to hear what more knowledgable people thought.

 
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