A.I.M. For Exchange Traded Funds

[Toofuzzy]

Writing Options

I previously bought some shares of CREE @ $24.50 and at the same time wrote
June $22.50 PUTS (giving someone the right to sell me more @ $22.50) for $5.00 / sh

I had wanted to write CALL options but was greedy and the stock went down making that unlikely at the price I wanted but I had the GTC order in.

CREE shot up more than 8% today and I got my price
June $25.00 CALLS (giving someone the right to buy my shares @ $25.00) for $3.50 / sh

That is a 15% premium for six months for just the CALL

$8.50 for both together or a 34% return in six months for both as long as the stock isn't PUT to me. If it is Called I lose the stock but that is OK.

If the stock is PUT to me I will effectively be buying the shares @ $14 / sh which is below the 52 week low.

More typically CALL and PUT options near the money pay about 10% premium.
The danger with using them as part of an AIM strategy is that you will get wipsawed.

Toofuzzy