Martha Stewart Update & Gettin' Paid

Remember the MSO trade I wrote about on Sept 19?
You know, buy the MAR2007 20 calls for 95 cents because they were a steal at that price...

MSO stock rocketed up this week... the calls officially doubled by yesterday's close and were being bid at 2.25 by today's close.... absolutely love it... gonna have to close out some and let the rest ride into the earnings call Oct 31. Considering the substantial volume behind the up-move this week, I'm guessing some big institutional money knows something. No concern here though--gotta take some off the table, regardless, as its the prudent thing to do.

Although, the better trade would be to just short common stock against the calls on a 1:3 ratio because shorting common against in-the-money calls is essentially a free short that you can trade a small short position around (which is why you do just the 1:3) and profit from short term pullbacks (via covering the short common, and getting more net long via the same calls), while leaving the call position intact--basically this keeps you from paying the nickel or dime spread (bid/ask) on the options and just paying the penny spread in the stock, but still actively trade around the core options position. But since I can't short I'm just stuck selling the calls for a profit--trust me, I'm still pretty happy about a trade that's gone up 130%, and if all trades turned out this nicely, I would gladly give up the ability to short common forever! :)

not to shabby an outcome for the only equity options trade I suggested on this blog--maybe I should do this more often?