The buyers of this stock have been made up of among others, die hard FRO fans (I've been one), and alot of die hard divi hunters-followers. Lots of the the FRO fans have been falling off recently, waiting for better opportunities. With 2nd quarter almost over, and no rise in tanker rates on the near horizon, the next quarterly div should come as a shock to the divi hunters. Expect to see another big rush to the door when it gets announced. Savior for a while may be when plans for the remainder of SFL gets announced, depending on if its a straight payout or perhaps ontop of next quarters div. JMHO.
A naked put is the same as a naked call as follows:
When you sell a "covered" call, you own the underlying stock, otherwise the call is naked.
When you sell a "covered" put, you are short the underlying stock, otherwise the put is naked.
The covered put is more confusing than the covered call, but if you think about it, it makes sense. If you are "short" the stock and sell a put, then if the buyer of the put exercises it, your short position goes away, see?
I sold the Aug, 35's. I'm betting that the stock price will not drop to 35 between when I sold and Aug. In fact I'm betting that, by summer FRO should be in the 40's. However, if that does not happen and I am "Put" the stock, FRO @ 35 is not a bad deal.
What I don't understand here is the concept of a "naked put". I understand naked calls but how does a selling a naked put work ???
Always be prepared to be assigned.
I prefer to be in control. If you think it's going to continue to go down, BUY a put. As it sinks you're value goes up and you can SELL your put for a profit. It's a controlled way of shorting a stock.
You'll never be at risk for assignment ($3500 please for a stock worth LESS) and will only be at risk for $140 (Aug 35).
At the very least, reconsider Nov. There's ALOT of high oil demand between now and then (summer driving and hurricane season).
Long time aol sufferer! Like to see many posts on here,not much going on over there. Very knowledgeable folks though. Any thoughts over here on possible m+a activity in this sector?FRO looking for it, VLCCF changing bylaws to allow it.....