[Selling Calls against Siebel System (SEBL) LEAPS/Selling to open May 10 calls (SGQEB)/Limit $0.25]
Dear Member,
I own the '07 12.50 calls on Siebel Systems and paid $0.65 to enter that position. I am now placing an order to sell to open the May 10 calls (SGQEB) for $0.25. If filled, I will have a diagonalized calendar spread (short the May 10 and long the '07 12.50 calls). This trade would represent a 38.4% return on investment before commissions, bring in some income, and reduce my risk in the initial position. As long as SEBL stays below 10 until May expiration, I have no need to adjust.
DISCLOSURE: At the time of publication, I own the Jan '07 12.50 calls on SEBL.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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