Santa Claus
NYSE Group
NYX-N
TOP PICK
Dec 24, 2008
Strategy: Buy this and 1) Sell June $25 Calls @ $4.70 2) Sell June 25 Puts @ $5.70 for a net cost of $14.06. For selling the Call option you agree to sell the shares for $25. For selling the Put options you agree to buy more shares at $25. Only one of those options will have any value by June.If stock goes above $25 your return is $25 divided by your net cost of $14.06 giving a 74% return.If stock drops below $25, you have to buy another block of shares at $25 and the $25 plus the $14.06 net cost gives an average cost is $19.26, which is a very good investment.Stock also has a 6% dividend.
You buy this at $33.70, Sell the NYX January $35 Call at $2.85 and Sell the NYX January $30 Puts at $2.50. If the stock declines, you could average in to the position over the next 9 months. You are obligated to either buy at $30 or sell at $35.
Exchanges are wonderful proxies for the economies they serve. Looks like it’s on the mend. If it could get through the $31 level, $50 is a possible target.
(Market Call Minute.) Is the European deal dead? Looks like it will have difficulty getting through. Don’t Buy as you don’t know if the deal is going to go through.
Doesn’t own any exchanges. This one in particular has had some challenges in terms of growth. Decent dividend yield. Stock trading volumes have generally been declining over the last number of years and he doesn’t see many ways to reverse this.