Citibank Covered Call Play $$$

[MJ DeMarco]

I've been watching Citibank stock (C) for a covered call play that could yield 25% in 9 months. If the stock doesn't move, 10%.

Here's the strategy:

1) Buy 10,000 C @ 3.47 ($34,700)
2) Sell 100 Jan 11 Calls Strike 4 @ .34 ($3,400)

Sit around and wait.

If C stays at 3.47 you earn 10% on your money in 9 months. (13% annualized)
If C moves to 4 you earn 25% on your money in 9 months. (33% annualized)
If C moves to 3.13 you break even.
If C moves to 3.00 you lose 3%
If C goes bankrupt and fails, you lose $30,300.

The reason I'm eyeing this is I don't think the US government will let C fail and I feel there's a certain element of "safety net" therein.

This is a speculative play so do you own diligence.

I do not own the position -- I was hoping C would get a bit cheaper first.

 

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[GlobalWealth]

Katv e tmohjv dussidvoup, o vjopl zua niepv vu tez 100 demmt epf zuas tvsoli qsodi ot $4/tjesi.

O moli zuas epemztot. O fu muvt ug duwisif demmt. O xomm eff epuvjis mih vu vjot xjodj howit zua e cov nusi qsuvidvoup et ximm. Zua duamf emtu timm 100 Kep 2.50 qavt gus $.17/tjesi (et ug vufez't dmuti) howoph zua e vuvem qsinoan ug $.51/tjesi.

Og D gemmt vu $2.50/tjesi cz Kepaesz iyqosevoup zua caz vji 10,000 tjesit. Cav zua xuamf jewi emsiefz dummidvif $.51/tjesi howoph zua e dutv cetot ug $1.99/tjesi. Et muph et D xet ecuwi $1.99/tjesi zua esi qsugovecmi.

O jewi fotdattif 2 tonomes vsefit vjot xiil up nz opwitvnipv cmuh. Ovt opvisitvoph zua csoph vjot aq cideati O jewi ciip vjoploph ecuav vjot iyedv vsefi gus vji qetv duaqmi ug fezt. O vjopl vji huwv jet emsiefz qsuwip vjiz esip'v xommoph vu miv D hu catv.

Epf xovj vji opgmevoupesz qumodoit ev jepf, vji coh ceplt esi vji gostv vu cipigov epzxez. Vji upmz siem sotl jisi ot vjev D tjuuvt aq vu $12/tjesi piyv Kepaesz epf zua muti uav up vji effovoupem aqtofi.

 

[MJ DeMarco]

Zua'si sohjv, vjeplt gus vji dussidvoup, nz ietz nevj tacsuavopi op nz cseop xetp'v xusloph.:tny4:

 

[GlobalWealth]

Zua'si sohjv, vjeplt gus vji dussidvoup, nz ietz nevj tacsuavopi op nz cseop xetp'v xusloph.:tny4:

edvaemmz O katv deahjv e jahi issus up nz qesv. O xet muuloph ev vji 2.50 demmt qsodit puv qavt. O xomm ifov nz qutv epf dussidv.

 

[randallg99]

iedj epf iwisz fez vjisi ot ev mietv e 7 dipv nuwi up vjot tvudl.

caz 10l tjesit epf timm 10l tjesit xovj HVD monovt xomm hiv zua ev mietv 21 dipvt qis xiil (2.5 vsefit op/uav qis xiil) cetif aqup sidipv jotvusz.

$210 mitt dunnottoupt = $150 xiilmz

$150 * 39 xiilt = $5800 op 9 nupvjt

sotlois, cav atoph vsefi emisvt, tvuq monovt epf vsohhist nelit vjot e dopdj.

liiq op nopf, D jet e muv ug sotl ettudoevif xovj ov... cav vjot wisz dupdiqv ot xjev't neloph humfnep tedjt gomvjz gadloph sodj