TalkFNStocks, Options and FOREX investments

We are making a cheap highly speculative play in Charles Schwab (NASDAQ: SCHW) by buying the March 2010 $20 call options. We say cheap because the premium we are paying is only $40 per contract. We say speculative because the stock price is currently at around $17 and we need it to go up over $20.40 to make any money on this trade.

However, our expectation is for SCHW to trade higher (around the $19) range by mid January 2010 and we will sell the call options at a higher premium. Like we said earlier, it is a speculative trade. But the risk is low and upside potential is very high. This may be one of our last 2009 plays that we are hoping will jump-start our 2010 returns portfolio.

Sponsor: Penny Stocks

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Tags: call options, Charles Schwab, NASDAQ, premium, SCHW, speculation

This entry was posted on Wednesday, December 16th, 2009 at 1:50 pm and is filed under Options, Stocks. You can follow any comments to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.