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Replies to #152 on Covered Calls

Joe Stocks

05/01/08 1:39 PM

#153 RE: m_winston #152

Well, the ask will give the holder 40% of the current stock price right now to trade with over the next 261 days. Look at it as a covered call would be a way to look at it. If you owned the stock here at 19.35 someone will give you 7.90 right now to play with next 9 expirations. Free money and the writer of the call has dwonside protection.

If you like DFS and think it has potential to hold for that length of time probably not a bad way to buy it with the call but not much downside protection in possibly losing you premium.