At 11 cents for $4 strike price due in a few days looks so attractive. Imagine the reward if you are willing to buy 1,000 contracts and it goes beyond $4 by next options expiration date. Very tempting...
I hope some of you guys made some money, buying at 10 or 11 cents. Not that it matter if you don't believe me but, I made over 80% on my 1,000 contracts. The total commission was a bi@ch though. Round trips costed me almost $2,600.
Maybe AA's earnings after hours on Monday and Nomura's cautious note about KOL did spoke the coal sectors; and it's Friday also. In any case, ACI went as high as $3.78 today. Next week's start of 2Q13 earnings can most likely take an oversold stock up. Shorts might have to cover to maximize their gains at its price level.
Yes, at the current price, it is like like options. However, 1,000 contracts equal to 100,000 shares. If you can collect 30 cents on this options play, that's $30,000 within two weeks. This stock is criminally played down. Let's see if they want to play it up from my scenerio. $4 PPS is not asking too much when it should be worth at least $5.50 right now.
When the stock price goes up, the premium will also go higher. It does not have to hit $4 by next options expiration date. The call premium can go to 20 cents by then, even if it can not hit $4 strike price. Maybe the price of $3.85 can take the call premium to 20 cents or more in two weeks.
I think something extremely drastic would have to happen in order for these to finish in the money -- maybe something like a terra attack on a natural gas pipeline, or something. Or maybe even that wouldn't be enough.