The LEAPS Option Trader
105 W. Monument Street
Baltimore, MD 21201
Tuesday, November 2, 2004
Email – #209
** Take 30% Now or up to 700% Later
Our Intel (Nasdaq: INTC) call option is up 30% in the past couple of weeks. We just cashed in our Placer Dome for 291%. What do the two have in common? Here’s what. If you missed out on the triple-digit gains for Placer because you are a new member, here is a chance to experience the same type of return on Intel.
Here’s what you need to do: If you cannot follow this part of the strategy, then sell your Intel calls (WNL AX) and book the 30% profit. But, if you can, and I know that most of you can do this, then sell the Intel January 2006 $25 call options (WNL AE) at current levels of $2.05 – you may get a little more or a little less – against your current position.
What does this mean? Right now you own the right to buy Intel at $22.50 with your ownership of the WNL AX option. By selling the WNL AE option against your WNL AX position, you are entering into a spread transaction that limits your gain on the position to the difference between $22.50 and $25, or $2.50. However, when you sell the WNL AE option, you will receive $2.05, reducing your cost in Intel to $0.35 – taking over 80% of your money OFF the table. Now you stand to make $2.50 on your investment of $0.35, or more than 700%.
Again, either sell your Intel calls for a 30% profit or enter into this spread and boost your potential gains to 700% or more.
Regards,
Karim Rahemtulla
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Bio:
Karim Rahemtulla is the former Investment Director of The Oxford Club. The editor of The Smart Options E-Report, The Income Trader – A Covered Call Strategy and The LEAPS Option Trader, Karim is also a regular contributor to The Oxford Club Communiqué. His highly successful trading systems use covered calls and LEAPS to boost returns on blue chip stocks, and during the bear markets of 2000 and 2001, his picks outperformed the major market averages. Educated in England, Canada and the U.S. and fluent in several languages, Karim travels the world to find the best investment opportunities for our members.
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