So I just could not wait any longer. I am compelled to enter into a position for RIMM. I have been contemplating all morning how I could and/or wanted to put this position on and how I could limit my downside risk in the short term.
So today near the close RIMM was trading near $65.7 when I sold a $60/$50 "Vertical put calendar spread", not really sure if that is even an official position name. But anyway I sold 2 of the Jan '12 $60 puts for $12.55 per contract and bought the 2 Feb '10 $50 puts for $0.25 per contract.
As I did not want to miss my entry on this name. In the short term I still think that there is some downside in RIMM. And if there is I plan to sell the puts for a profit when I feel the bottom might be in. If not then I bought some cheap insurance. Again I am not looking to collect all the premium.
Currently my maximum gain is $2,460 with a maximum downside of $2,000. This is about a 25% on capital at risk.
Also to see additional analysis from previous play you can follow this link:
http://shareandcritique.blogspot.com/2009/12/rimm-earnings-play.html
Closed the short puts going into INTC earnings as I think they could set the tone going foward. Booked about $200 in profit for now. I kept the long Feb '10 $50 puts though as I intend to put this trade back on.
ReplyDeleteSold two of the Jan '12 $60 puts again on another dip in RIMM.
ReplyDelete