Replies to post #39353 on 22nd Century Group Inc (XXII)

[brooklyn13]

Don't buy calls, sell puts.

[esad1]

The greedy get needy...if you are going to play buy the longest leaps you can..if someone will sell them to you. Lot of news coming out in Q1..but anyway..good luck with what ever you do.

[Justfactsmam]

your question to me re: options slid by me...just saw it.

First...I take risk, but don't gamble. Since you are expecting announcement by Jan 31, that cuts out January (contrary to Perke's inference...) So wise to stay away from January 19th expiration and assume it could occur between 20th and 31st. So it leaves Feb 16th options expirations (and gives you a lot more time into Feb. for management to perform).

Conservative would be bidding at .60 for 16 Feb 2 Calls...assuming a drop between now and then to $2.48 (even if only a quick spike down and recovery.

Or more likely to get them with patience if you would bid .65 or at lease be more sure to get them (307 contracts). This gives you control of another 30,700 share until expiration. My thought process is that $2.50 is pretty solid support and therefore .50 of you premium likely protected, and only .15 at risk. If you are correct before Feb 16th expiration and stock goes to $6.00... your $20,000 would return $102,845. (or over 5x return). If no announcement and $2.50 holds on expiration...you would lose .15 or approx $4,600.

pps...dont forget the trading costs in and out...more contracts more expensive...800 contract in and out could cost you $2000 alone

A even greater risk would be going out to Feb 3 calls at .25 with 800 contracts (controlling 80,000 shares). Cost basis $3.25... do the math... 80,000 x $2.75 + (add .10 premium) or $3.10 = $288,00 net profit (or over 11x return)... but you lose entire premium of $20,000 if SP does not reach over $3.00 on expiration.

Going to Feb4Calls at .10 ...on $20k...reaches $6.00 = $380,000 return or 19x return...

IMO...The First is a trade/investment, Second, a high risk trade... Third ... gambling at Vegas. Pick your poison.

ps greed usually controls the novice options trader...we have all been lucky once in a while...but money management with slow and steady growth is less debilitating...and lets you play another day and learn from greed. Ultimately, if you gamble...the house almost always (80% of the time) wins in options.