Michael Shulman, Expert Trader, Analyst and Educator

Michael Shulman, Expert Trader, Analyst and Educator

I’m sometimes deemed too conservative. This week, how about a conservative but apparently risky position?

Let’s play…

Virgin America (VA) has been rated the best airline in the U.S. three years running. The company is now in play, pushing the stock from $30 to $38 in a week or so.

This is a wonderful company with expanding profits, so there is, in the long run, a manageable level of risk—if they aren’t acquired in the immediate future.

If you buy VA shares at around $38 and change and sell the April 40 call, you pocket $1.20 in cash immediately. If you are called out, you net roughly $3.00 in less than a month.

That’s a very nice way to play the company and the stock.

Think about it…

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