In that article, I listed five stocks to buy and the associated puts and calls that would generate very nice returns even if the market went sideways. As it turned out, things have gotten appreciably better (although after a lot of choppiness).
The best part... every one of the underlying stocks is now well above the strike prices we chose. If nothing changes through the December to February expiration dates all five puts will expire worthless and all five calls will be exercisable.
The average holding period from inception through final expiration dates was 5.3 months and the average static return was 23.68%. That made for an annualized rate of over 53% plus dividends. With each stock we still have a very nice margin of safety in case the market, or these particular shares pull back over the next few months.
A 10% move in the indices is very nice. Making much better returns with less risk ...
At the time of publication, Paul Price was long shares and short options in SEE, EEFT, IM and FLR.
Dr. Price joined Merrill Lynch in 1987 and over the next 13 years worked with A.G. Edwards, Wheat First and Ferris, Baker Watts. Dr. Price enjoyed enough success to retire in October 2000, but he continues to write and give investment seminars.
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