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Alcoa Inc. Message Board

  • longtimefollower longtimefollower Dec 20, 2012 2:59 AM Flag

    Buying Jan $7.50, Apr $8, July $8, and Jan 2014 $8 call options.

    The premiums are dirt cheap...merely because the stock has been in a narrow trading range, for many many months.

    But the notiont that that will continue, into next year....is patently absurd.

    I'm a glass half full kind of guy. I think the economy is going to grow around 3%, and AA being a proxy for a cyclical rebound, the stock has a good chance of seeing $12-14, in the next 6 months.

    Buying $8 calls at around $1 or so apiece, would allow one to quintuple one's money, if the stock goes to $13. Meanwhile, downside seems very decidedly limited to $8, on the stock.....so the worst case scenario is you are "forced" to buy the stock at somewhat higher prices than current, several months from now, but the stock is still trading in the $8's.

    This stock is in a CHANNEL....and that channel is likely to be broken out of, possibly quite violently, to the upside, imho.

    Sentiment: Strong Buy

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17.09+0.47(+2.83%)Jul 22 4:01 PMEDT

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