Zion Oil & Gas Inc (ZNOG)

[DragonBear]

Make your ZN stock work for you-not that_way

Not that there really is a way.

Today's volume of Sep Calls strike $1 is 80 shares at 0.05. Congrads you have made $48, IF the stock stays well below $1.

YOU still get to keep the 800-900% upside should ZN close over $1.00 and remember if ZN pps doesn't close over $1.00

No you have it backwards. By selling Calls you are betting the PPS is going down. Thus, the Calls sold serving as a hedge against any PPS decrease for the shares you hold. If the PPS only goes up slightly from today, time decay will make the Calls bought by whomever worthless by Sept. Likewise worthless to the holder if the PPS stays the same (time decay again), or the PPS goes down. Gongrads on OE day with the PPS plunging, making the Calls worthless, you have made $48 on those 80 calls sold. Hedged the loss for a whole 80 shares you hold.

On the other paw if the PPS zooms up to the dream price of $1, then the value of the Calls held by the buyer increases. Let's assume the PPS as Sep OE nears is $1.25, and the Calls are worth 0.94. You are in for a -$48 loss/Call sold. Either you buy the Calls back to close for $0.94, if you can at that price. Or you have to give up 80 shares to anyone exercising the option at 1.25. In which case although the PPS has gone up to $1.25, the 80 shares you saw appreciate now belong to another. You might have originally paid $1.25 for them. And if so you just suffered a $1.25-0.05 loss/shr for 80 shares.

If one really really believes in the ZN stock, and that it will be zooming up to $1.00+, then you should be selling Puts. With you the seller betting the stock will go up, and the buyer betting it will go down.