Playing the Expiry for July 1, 2011
Canadians will be celebrating their national birthday this Friday, but inter-listed stocks like Research in Motion [RIMM:NDQ,RIM:TSE] won't get a day off down south.
RIMM weekly options are still pricing in two full days of trading, but don't expect much movement on RIMM on Friday because of the holiday, unless significant news is announced.
The stock, trading at roughly $28.78 on the NASDAQ, in essence, has one and a half days until expiration, if you believe that there will be little price-action on Friday, which historically is true. The 29 call last traded at above 35 cents, giving you a break-even price of $29.35 or 1.98 per cent. The stock has been beaten down from $70 to new historic lows, and not too many are giving it a fighting chance in near- and long-term.
Whether this is covered or uncovered, it's a good chance to earn a pretty penny before the long weekend.
Disclaimer: Writing uncovered (or naked) options requires substantial margin and is only available to sophisticated traders. Uncovered calls have unlimited risk and can have infinite losses. Before making any trade, always discuss this with your advisor or professional broker. Reminder that all Playing the Expiry posts are transactions placed in my account and should not be taken as professional advice.
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