Peabody Energy Corporation (BTU)

[LouisDesyjr]

'Limited' trading with $0.50 puts

One thing I had been trying to do is to figure out what to do with my $.50 puts. I should have sold them yesterday, along with everything else, but didn't.

BUT anyone holding $0.50 puts may be able to use them to 'protect' trading in the common shares for the same amount of shares as long as they but the stock at, near, or below the strike price. So unless BTUUQ has a big drop, it looks like that is what I will be doing, assuming the stock drops to $0.50 or less prior to June.

this risk in holding and not dumping is that th options expire worthless, but the pricing in them is so bad that it wouldn't be much worse than selling at market now.

Even if I by shares at $0.80, the worse I can lose is down to $0.50, since I could exercise the options and get back $0.50 per share.

The benefit is that I can trade the stock, and have downside protection at $0.50.

One problem is that I am limited to the number of options I have now, since when a stock is in bankruptcy, you can't open new positions in the options, you are only allowed to sell the options and close the trade, or exercise the options and thereby close out the option.

Louis J. Desy Jr.