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Titanium Metals Corporation Message Board

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  • whyiloveamerica whyiloveamerica May 3, 2006 1:12 AM Flag

    holding options through a split?

    Thanks for your thoughts. I think people are thinking like you and I both are, which is why the longer term options are probably so much more expensive; however, it doesn't look like this thinking is whittling down to the May and June in-the-money options as much. I'm currently holding the May 60s, and am happy that the premium on those is only .60 or so at the moment.

    I just did a bunch of calcs on the Dec options, and those suckers look quite expensive; however, they look to be a great bet for those of us that think the stock will be $75 post-split by the end of the year (giving a trailing PE of 30 at $5/share 06 earnings). In that case, the 95 calls would present a 600% increase vs. what would be a 200% gain by holding the common on margin.

    I'm waiting until earnings to take my longer term position, but the Dec 95s, while seeminly crazy, aren't really that nuts considering the upcoming split.

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    • Gosh! Those little boogers are expensive...almost $8, that's $4 for a strike that is $20 out of the money.

      Your plan is a good one, unless there is trouble. I'd prefer to spend a little more on some not as far out, but deeper in the money. Even if they don't perform exactly as the Dec's, they have time to do well. When the numbers come out, and I think it can whether the month of Oct, I may buy some DEc calls.

      It's a gamble I'm not willing to make quite yet before the numbers. I might get the Sep's but even that is a bit too far out for me. I don't like to hold options, they make me nervous. hee hee