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Author: blacktreechaser Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Re: Possibly, an Options Game Date: 2/29/2012 8:24 PM
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Naked call??

I must have totally mis understood his spread idea in the first post. I interpurted it as buying a bond selling under par, and buying an out of the money put option against the same company...which would not require Level 4. So if the bond stays solvent and makes its way back to par, it more than offsets the cost of the put option.

But if the bond defaults, hopefully the stock price will plummett, and the profit made on the option hopefully exceeds the cost of the bond.

That's what I think he was refferring to anyways. I sell lots of out of the money call options against stocks I own. I don't consider myself as "shorting the stock," though..I'm just looking for income.
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