Tuesday, July 29, 2008

Buy IBM (sell puts)

Buy IBM via selling the Aug 115 puts

IBM had good earnings two weeks ago, and has been consolidating. The puts are 12 points out of the money, with a modest premium that reflects the low chance of IBM going below the strike before expiration.

I am not loading the boat by any means, with this low premium, high probability trade.

Positions: long BUD, IBM

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