[Creating Spread on Sirius Satellite Radio (SIRI)/Selling to Open Dec 6 Calls (QXOLI)/Day Order/Limit $0.25]
Dear Member:
Sirius Satellite Radio (SIRI) has dropped below the uptrend line. I own the Jan '08 2.50 calls and I could choose to sell them at a modest loss or create a spread. If I create the spread, I would bring in some income and reduce risk in the initial long LEAPS position. I have decided to create the spread by placing a day order to sell to open the Dec 6 calls (QXOLI) at a limit of $0.25. If filled, that would represent an 8% return before commission on my original investment of buying the LEAPS calls. If I happen to be called out at $6 it would assure a profit although I will try to avoid that assignment with additional adjustments if I think they will help me.
DISCLOSURE: At the time of publication, I own the Jan '08 2.50 calls on SIRI.
Sincerely,
Bill Kraft
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