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A bullish-to-neutral strategy on the beaten-down BlackBerry parent
November 20, 2009 2:30 EST Related Symbols: RIMM
If you believe Research in Motion, Limited (RIMM) still has a chance to fight back for market share in the mobile communications industry, buying its shares below $60 might best be done with a covered call strategy for some extra downside cushion.
RIMM Covered Call Trade Details:
RIMM is trading at $59.77.
Profit/Loss Details:
Maximum potential profit:, if assigned, is $3.98 (the premium received plus the difference between the strike price and the stock purchase price).
Maximum risk: $56.02 (the stock price at the time of purchase minus the credit).
Breakeven: $56.02 (the stock price at the time of purchase minus the credit).
A covered call has essentially three possibilities:
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