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GeoGlobal Resources Inc. Message Board

  • tarragon61 tarragon61 Jan 30, 2006 11:49 AM Flag

    View from Options Pit

    Spreads are wide, as usual, and prices fairly bullish, but some decent pricing on the call side, depending on how bullish you are.

    On the put side, there are some good trades for the bullish, for put sellers, if you're authorized for options and have margin to spare. (I'm using the bid for pricing, but you should be able to get a bit more out of the buyer, if you're patient.) For example:

    GGRNV FEB 12.5 Puts -- 2.00/2.40
    Even at the bid, at Feb expiry 2/17, either you get to keep the $200 per contract, or you get assigned 100 shares at net 10.50. Win-Win. (I've got a couple handfuls of these already.)

    GGROV MAR 12.5 Puts -- 2.60/3.00
    GGROC MAR 15 Puts -- 4.50/4.90
    Same type of scenario at March expiry 3/17, but shares at 9.90/10.50 respectively.

    JUN expiry -- similar trades in the 10, 12.5 and 15 strikes. 12.5s look especially good at 3.70/4.10, as the premium will nearly match the margin required of 3.75 (at 30%). Basically, 100% on your money (margin) in 5.5 months, or the shares at 8.80, if we're under 12.50 on 6/16. (I can hear TSP going "Yeah, right.") I sold some 10s in this expiry back when we dropped below 9.

    SEP expiry -- a bit out there to be selling puts, for my taste, at least, but a little extra time premium over the JUNs.

    If you want to sell the puts just for the "free money", and very little risk of getting assigned, then take a look at the 10s. FEB - .55 bid, MAR - 1.15, JUN - 2.20, SEP - 2.70.

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