Here is a strategy I might employ Monday morning if I continue to feel as confident that IOC will be at $135.00 by Jan 18th.
Assumming I have, say 1200 shares of IOC.
I would sell 200 shares at 92 on Monday morning (provided news of a deal hasn't occurred).
$18,400 gross proceeds
I would then buy 30 contracts (3000 share equivalent) of the 1/18/2014 100.00 calls at $6.30
$18,900 gross costs prox.
If IOC does hit $135.00 by Jan 18th, instead of the $8600 profit I might see from the 200 shares I sold, I would see prox. $86,000 profit from the sell of the calls when the price hits $135.00.
I would then let the remaining 1000 shares ride for the rest of the year in case the pps runs to 240+. If instead for some reason the stock returns to the $80.00 level after hitting the 135+ I sold at, at least I locked in some profits. I would then buy 700 shares prox. and set the remainder of the proceeds aside to pay the tax man, giving me an additional 500 shares net.
Of course, I have to be prepared to lose the entire $18,400 on this "bet". - Something I have to think seriously about. - Historically, when I am as confident as I am right now about a rise in pps, it seems we always get blind sided by something unexpected (govt, or macro event) and the PPS tanks, so I must be prepared to lose the entire $18,400.
Any other strategies that any one else cares to share (other than buy and hold)? -- yea, I know, I always post the same type of info when things look like we are about to see some significant movement.