Navivest Stocks and Options Blog » ITMN http://www.navivest.com/blog Stocks and options trading ideas and market commentary. Tue, 07 Sep 2010 10:03:44 +0000 en hourly 1 Option Trade of The Day – 02/26/2010 http://www.navivest.com/blog/2010/02/option-trade-of-the-day-02262010/ http://www.navivest.com/blog/2010/02/option-trade-of-the-day-02262010/#comments Fri, 26 Feb 2010 17:16:54 +0000 Navivest http://www.navivest.com/blog/?p=66 The following is the latest from our subscription-based Navivest Options Writer service. It is a very compelling trade that we are making freely available to readers of the Navivest blog.

Shares of InterMune (ITMN) are trading at $13.84, currently down $0.14 on the day. The stock in in a downtrend, after rallying from $13.46 on January 22nd, to a high of $17.81 on February 3rd.

The options on the stock are very richly priced and the March 20 calls are asking $2.00! Selling these, translates into a 14% potential in just three weeks on a covered basis. We will be selling uncovered calls, making it a 100% proposition if the stock does not get called away on us.

As a biotech company, there is the risk that the comany could announce some news that sends the shares soaring, but those risks, in the three week time frame we will be in the trade, are limited in our opinion.

THE TRADE:

Sell the InterMune (ITMN) March 20 calls.

TRADE FOLLOW-UP:

The First Solar calls are now bidding just $0.05, down about 95%, which is great for us, having sold those calls. Keep position open.

For information on Navivest Options Writer, click here.

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