Trade - 4/14/09 - IR

STO (2) Naked Puts - IR May 09 @ $15 for $0.90 each. Net Premium $179.

Ingersol Rand is a play on the turn around in on the economy. If I get put I will be in it for $14.10 (over a 10% discount from current price) and have a dividend of over 5% at that price from a solid company.

REMEMBER: A naked put is a synthetic covered call. The RESULTS will yield the same return. THE BIG DIFFERENCE is that my cost of capital on a naked put is ZERO. In other words I have nothing invested in this trade and I collect my premium immediately. If I did a covered call on this I would have to invest $3000+ in the stock first. Since I trade in a NON-retirement account I have margin enabled. I don't use it to buy stocks but it basicly sits there at no cost and allows me to do naked puts to move into purchase positions to later do covered calls. I am doing more NPs right now because I am in a high cash position because most of my CCs have been called between last month and this Friday.