Wednesday, March 23, 2005

Another down day...

Well another down day in the markets.
I will look into selling a call option on NTE soon (either this week or next). The May 30s might bring in $.50 (since option contracts deal with 100 shares, normally, the .50 will be a total of $50).
So the option premium, adjusted for a $8.50 transaction cost, will represent a +1.74% on my original investment. The June 30s will bring in about $65, and the September 30s will bring about $140. If I choose the May 30s, then I can do this strategy every two months, but if I use the September then I will have to wait until September (assuming the stock price remains under $30) to write another option. I will also look into when NTE pays out their dividend, since this will affect the call options as well.

In terms of betting, I will most likely place a small bet ($15) on North Carolina to win. I think they have the better chance of winning, although I think Illinois has a good chance as well.
A $15 bet for N. Carolina to win will yield a total of $17.50. Doesn't seem like much, but it's a good chance of making 16.67% return in two days.
Then I will look at the match-ups for the next round, but most likely cash out.

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