Zacks’ Voice of the People Highlights user badger729: “Let’s Try Some Structured Finance” from the People & Picks community.
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Let’s Try Some Structured Finance
Instead of just going long these stocks, I’m going to use options to try to get a good return with less exposure to risk.
Let’s start with Amtech Systems (ASYS). I’m buying 3 March 19 calls @ $25 for $510 and 3 March 19 puts @ $22.50 for $270. My total cost is $780. To buy the stock my cost for 300 shares would’ve been $7374. To profit I need the stock to either be higher than $27.6 or lower than $19.9 by March 19.
Next is Coherent Inc. (COHR). I’m buying 3 March 19 calls @ $65 for $390 and 3 March 19 puts for $435. My total cost is $825. To buy the stock it would’ve cost me $18357 for 300 shares. To profit I need the stock to be higher than $67.75 or lower than $57.25 by March 19.
Third I’ve got Keynote Systems (KEYN). I’m buying 6 March 19 calls @ $20 for $360 and 6 March 19 puts @ $17.50 for $510. My total cost is $870. To buy 600 shares of the stock my cost would’ve been $11100. To profit I need the stock to be higher than $21.45 or lower than $16.05 by March 19.
Lastly I’ve got Telestone Tech (TSTC). I’m buying 10 March 19 calls @ $10 for $400 and 10 March 19 puts @ $7.50 for $600. My total cost is $1000. To purchase 1000 shares of this stock my cost would’ve been $8460. To profit I need the stock to be higher than $9.46 or lower than $6.46 by March 19.
My total cost for these 4 picks is $3475. To go long on the same volume of stock I would’ve spent $45291. The problem with this strategy is that I need significant moves to make money. For ASYS I need 12% up or 19% down. For COHR I need 10% up or 6% down. For KEYN I need 16% up or 13% down. And for TSTC I need 11% up or 23% down.
About the Zacks Community
In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more visit http://www.PeopleAndPicks.com
AMTEC SYSTEMS (ASYS): Free Stock Analysis Report
COHERENT INC (COHR): Free Stock Analysis Report
KEYNOTE SYSTEMS (KEYN): Free Stock Analysis Report
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