Monday, August 17, 2009

New Trade - VALE - 8/17/09

STO (3) Naked Put - VALE (VALE SA) Sep 09 @ $18 Strike for $0.54 each. Net Premium $160. This is an original trade I made on 7/31 but then exited when it spiked up. The stock is down again in sympathy with negative information out about China. I am not worried about that and I am taking this opportunity to get back into a good company.

Risk Management:

Ticker: Vale
Expiratoin: 18-Sep-09
Invest Date 17-Aug-09

Current Stock Price $19.60
Strike Price $18.00
Premium $0.54
Annual Dividend $0.48

Days to Expiration 32
Return (Assumes CSP) 3.00%
Annualized Return 34.22%
Downside Protection 10.92%
Effective Dividend if Put 2.75%

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