So why would I really want a blog...
Some of my good friends have seen my feeble attempts at trying to have message boards, and web-forums to get investing ideas out. This was great in theory, because we could all share research... What it ended up being was me posting my research... If that's what happens, I may as well blog.
First Stock Market Blog:
Last week on Friday we noticed an unusually large premium on Jan calls for DYN. I noticed this because I already own shares of Dynegy, and I have already sold (covered) calls for Jan.
When I sold my Jan@2.5 DYN calls they were going for .20/.25 (which is about a 10% premium. Thus my attraction to the stock, very nice premium. On Friday, it was noteworthy that at some point in the day (without any real movement in the stock price) those very same options jumped to .50/.55 (a +20% premium).
Given that only the options had this huge jump, and the stock stayed flat, one can only assume buyout rumors... People were not willing to gamble large amounts of money to buy the stock, but were more than willing to buy a few options (the right to buy 100 shares per option). Taking a bet that the $2.50 strike price would be far exceeded buy the buyout offer.
Naturally I bought more (since the stock price was basically unchanged) and cashed in on the new +20% premium.
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DYN did indeed jump to above $2.50, and has remained around the $2.50 mark since I posted this. My calls are Jan@2.5 so I will revist this post in that timeframe.
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