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Rock Solid Yields: Optional Options, TAL, DLX, CODI

Posted on the 19 July 2012 by Phil's Stock World @philstockworld

Rock Solid Yields: Optional Options, TAL, DLX, CODISince the July options are about to expire, this is a perfect time to contemplate some changes to the RSY portfolio or to simply roll over the options. The two options expiring on Saturday are TAL and DLX. Both are rated Strong Buy by Sabrient Systems.

The option on TAL is not in the money and is near worthless at $0.05, but it’s still close to the strike price of $35 at today’s close of $34.66. To play it safe, it might be prudent to close the position tomorrow at nominal cost of a dime or so; then sell the TAL Jan 19 2013 $35 call at limit price of $2.50.

The option for DLX is in the money and thus is more complicated. RSY recommends purchasing the option back at $2.20 and then rolling it over to DLX Jan 19 ’13 $25 call of at least $3.00, which will result in a loss of about 60 cents on the last option but more than make up for the sale.

RSY has not recommended an option on CODI as there was never too much upside on writing the covered calls. RSY recommends the CODI Feb 16 2013 $15 Call at a limit price of $0.70.

 

Best regards,
Ronald Rutherford
Corporate Macroeconomist

Full disclosure: The author holds or will hold the stocks mentioned in this edition of Rock Solid Yields.

Disclaimer: The Rock Solid Yield portfolio newsletter is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their personal financial circumstances in acting on any rankings or stock selections provided by Sabrient. Sabrient makes no representations that the techniques used in its rankings or selections will result in or guarantee profits in trading. Trading involves risk, including possible loss of principal and other losses, and past performance is no indication of future results.        


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