I notice some traders on this board are into Option calls in the '14 and '15 time range. As of now I only own stock. However, I am wondering if you guys would suggest adding to my positions through options instead of continuing to add to my positions as I feel like I could get a "bigger" piece of the Arena pie through buying call contracts.
I've got 2000 IRA shares as $2.5-$4.0 Jan 14 & 15. The only reason I do it is lack of extra $ to own shares. When I bought these 8 months ago or so, I was getting a 2:1 deal with final ave.cost of about ~$7.75. Now I have actually reduced my cost, because with my freed up cash I sell OTM cash ARNA puts. ~20 K worth to make a conservative ~$200 bucks a week. I'm not wealthy. But I make $ this way @ least. The taxes in a non-IRA account could be a pain however to deal with!
I have been trading options and the problem is you have to nail it everytime just perfectly for your trade to work out. . Being that Arna has not broke out since the FDA ruling Options have not been a very good trade as the decay wil kill you. I wish I had sold my 8.oo july and 9 dollar August calls last Thursday while pps was 8.47. I made the mistake of actually thinking Arna was going to fly on good scrpt numbers and we all know what happened there. If this weeks numbers are no good too. we could be seeing sub six next week, ........killing all my option contracts.
As I demonstrated some months ago, for a while you could have made money consistently - for 7 months in a row, I think - by buying the nearest out-of-the-money call immediately after the prior months expiration and selling it 2 days before the next expiration. There is now a huge overhang of call options for July, which virtually guarantee that the stock will close on July 20 just about where it is now. I would estimate that the expiration of the July 7-10 calls, representing over 5 million shares, will net the options MM's over $3 million. And we can ruminate about who might own that uncharacteristically big chunk of 9 puts, which have also made someone a lot of money. This is why the MM's will not let this stock crash, I think. It's too lucrative a game to keep hope alive. Skeptic that I am, I even have a small long position going into Friday.