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Otelco, Inc. Message Board

hdecker88 2 posts  |  Last Activity: Jan 6, 2015 8:33 PM Member since: Feb 22, 2008
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  • Reply to

    STRONG BUY

    by saltydog711 Jan 5, 2015 7:54 PM
    hdecker88 hdecker88 Jan 6, 2015 8:33 PM Flag

    I chose the Jan 2017 calls to sell because I wanted the lower risk and I really want to make it hurt to take my shares. Imagine if these shares don't get taken from me until Jan 2017? I will have collected 2.50 in distributions and 4.25 in price appreciation. 2 yr yield of 77%. If the price goes down to 9.00 I will probably buy the calls back. I agree on the low for the stock and I also agree that with the Distribution cut to the bone there should be very little downside left. Risk reward thing. Lets hope we all win.

  • Reply to

    STRONG BUY

    by saltydog711 Jan 5, 2015 7:54 PM
    hdecker88 hdecker88 Jan 5, 2015 10:16 PM Flag

    Buy the stock at 11.25, write the 13 Jan2017 covered call for 2.50 your net cash outlay is 8.75 - collect 1.25 (or more) per year or 14.28% Yield.
    If LNCO recovers and does well you might lose your shares.... what a bummer. You would walk away with $4.25 or a 48.5% profit plus any distributions collected up to that point.
    if LNCO suffers more you will keep your shares with a net cost basis of 8.75 and continue to yield 14.25% or whatever the distribution amount is.
    Seems like a lower risk way to play this opportunity. GLTA

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