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Alcoa Inc. Message Board

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  • yourdeadmeat69 yourdeadmeat69 May 13, 2012 5:16 PM Flag

    AA vs. BHP and Computer Trading

    The SEC, when these kinds of HFT are reported, look shocked, SHOCKED, say something has to be done, and do nothing (except fill out job applications to the major trading houses and banks).

    If you want to see Boss Tweed and Tammany Hall revisited on a national scale, you just hit the nail on the head.

    Your best bet is to swim with the sharks, and not fight them, because you have NO ONE on your side.

    One of the best reasons I sell covered calls against my shares.

    One relief factor, these clowns frequently have to "let go" to avoid overt manipulation--it adds to the credibility of not being dangerous enough to follow up--those times are few and far between.

    But worth watching.

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    • I have 5000 share AA @ $9.61. What covered calls look the most attractive to you based upon this? Personally, I think we are on the cusp of this thing turning around, but who knows really. Doom and gloomers have the day at the moment.

      • 1 Reply to inetguy2000
      • Altho I started with shares at $10.06, covered call sales I have bought back in the last couple months have me at $9.64 BE, not too far from your current position.

        If I were antsy at these levels, I would be SELLING October and January 9's for .89 and $1.10 respectively, or January 10's instead of January 9's if you think the stock will show progress beginning Nov.

        That gives you protection down to about $8.50, and about a 8% rate of return in the meantime, as long as the stock closes $8.99 or above. I don't think the stock will go below the one year low.

        Around Sept, I would buy back the calls if they were in the 20-35 cent area, and sell a leap at strike 10 for about $1.23 due Jan 14. Your BE should be about $9.00 by then, you're looking at $2.23 over a $7.75 out of pocket investment or 33% for fifteen months sitting on your hands. That's 33% over a two year period, counting from Jan 1 2012, excluding dividends. Great widows and orphans returns.

 
AA
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