POTENTIAL CASH FLOW DEALS

Hi there my friends.
I haven't forgotten to write the next piece in the comment category about 2012. I'm working on it right now. Well not right right now, but when I finish this blog I'll wrap it up. In fact, I have more than one blog to write. It's not just about the market or the economy, but about how to use this information to make more money. I'll call it "2012 part 2, and then part 3.

POTENTIAL CASH FLOW DEALS.

The market is not heating up. In fact, it's having a devil of a time with 12,400 (The Dow). But there are always trades to be made and profits to be gathered in. Here are some covered call possibilities for Feb. One has a good Jan. premium, so let's get to it.

ROYL: The stock was at $4.65. the Feb. S45 calls were .35 cents to sell. 1,000 shares would be $4,650, so if you sold the $5 calls and actually got called out, you'd make another $350. But you'd take in $350 now for agreeing to sell the stock at $5. It's not 10% but it's not bad. Look at a chart on this company. It has signed a pretty big deal and it's future looks good at this time, albeit things can change.

ELN: I've traded this one off and on for years. The stock is at $13.65, or $13,650 to buy. If you used margin that would be about $6,825. The $13 calls are going for $1.20 to sell. If you did so and got called out, you would adjust your profits by $650 against your gain. Still, you would take in $1,200 dollars for selling 10 contracts at $1.20 each, or $1,200. That would be a net of $550. But take a look at the $14 calls. They going for l65 cents to sell, or $650 now. You get to keep this no matter what. If the stock goes above $14 and you get called out, you'd make another $350 ( $13,650 up to $14,000 = $350). So, take in $650 and potentially make another $350. Pretty good cash flow now, and good potential for more later.

BAC: Look at Bank of America (BAC). The stock is at $6.50. Look at the Jan $6 calls. Yes, these expire next week, Jan. 21st. They are going for .90 cents to sell. That's $900 for you right now. If you get called out you'd have to give back .50 cents, or $500. That's a cool $400 for a week and a few days.
Now, look at the February $6 calls. They're going for $1.00 to sell. That is $1,000 and the same scenario if you get call out. Here's a good look at a choice and the difference it would make. I say, take the money at hand. Sometimes the near-term option is not going for much, so go on out to the next month. However $900 is $900. If the stock goes down, you can buy-back the option for less, keep the stock and then sell the February's then.

There are similar profits to ELN in JDSU. Also look at MU, RMBS, FRO, and even JBLU.
Happy Investing and Trading. Let me know how it goes or if you have any questions.
Your humble autodidact,
Wade