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Re: plfminthemiddle post# 306887

Wednesday, 01/19/2011 8:57:45 AM

Wednesday, January 19, 2011 8:57:45 AM

Post# of 432680
There are many ways to do it without using margin (pay interest)
If you could be able to do option, I did. You could initiate "SYNTHETIC LONG" option. Let's say stock is at $50.50
Synthetic long is SELL PUT 50 /BUY CALL 50 on any month.
You could do it at any strike price
They call it COLLAR if PUT/CALL are not same strike price.
Basically use cash from selling PUT to buy CALL
The cost would be about $0.50 +/- That is $50 to control about 100 shares.
Basically you own 100 shares of stock one way or other (in the future)
However the value of it UP/DOWN $1 per $1 with stock price.
If it does go down, You could close it out and taking lost.
If you really believe it would go up (for sure with nerve of steel), You use less cash (no interest payment) as long as you have enough cash reserve for margin power. That is what I did with IDCC. I own bunch of Synthetic long at JAN 45. Now PUT 45 should expire while CALL 45 gain a lot of value.
I plan to exercise CALL contracts any day now. Assume you run out of cash to exercise it, you could roll over to future month or taking profit.
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