$135 by Jan 18th

[Optionray]

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.

[smeltman]

We strategize alike. My problem was I used a similar one with a % I was kind of ok seeing go bye-bye if it didn't work, back in May/June, lol, with the Jan 2014's.  So a bit white-knuckle until this past week.  If you have a specific total net $ you want to make, then going Jan. 2014 is the way to go albiet much riskier. Maybe go with March 2014 instead. Less upside, but a 2 month cushion that could capture any buy-out bidding (which I only think is a 10% possibility.)

Fun times ahead. Last week allowed me to put aside 1 semester of aniticipated college costs for a daughter 7 years from now. Only 7 more semesters to earn, lol!

Go IOC!

[Putncalls]

What about the short squeeze? ALL the shorted share are under water at this point. Negative articles soon?

[Optionray]

What about the short squeeze? ALL the shorted share are under water at this point. Negative articles soon?

I can't imagine what the next short argument is going to be.  I think Hesson purposely addressed every short issue masterfullly.

[geologydude]

What about the short squeeze? ALL the shorted share are under water at this point. Negative articles soon?

I can't imagine what the next short argument is going to be.  I think Hesson purposely addressed every short issue masterfullly.

I am curious as well to what the shorts will attempt in reponse to last week's run up.  I just can't see all those shorts giving up without a fight.  They have always responded in the past.  Stay tuned.

[Palm]

Morgan Stanley stated what the next argument will be:

"A monetizing transaction would mark a transformation of the IOC story and should decisively rule on key debates surrounding a controversial story, driving a re-rating of IOC shares. Over the last 7+ years, the Street debate on IOC has focused on: (1) the credibility of IOC’s PNG resource; (2) the ability of IOC’s chosen partner(s) to execute on LNG monetization; (3) whether the PNG government would determine IOC violated its licenses and take IOC’s upstream assets; (4) ability of IOC to complete an upstream sell-down, a process that had begun an earlier iteration in 2009; and (5) how to value IOC’s “stranded gas” assets. Following a deal, we believe the key investor debate would switch to valuation. The debates will normalize."

So that's what we should expect, but it's a much less defendable "debate"; a deal takes the major unknowns and air out of the hard-core short arguments and they know it. After deals IOC will be looked at more like most stocks; is the pps getting ahead of valuation. Much simpler and more logical to deal with.

[will2bgreat]

Ray,

You already know you could do a bull call spread which represents less risk but also less reward.

Now, if you like risk, you could do as Ken suggests and sell the puts; something like the Jan 120s for about $31 and use this money to buy 3 Jan90 calls.  I would be cautious about this approach because there are still alot of shorts, and I think they still have some cards to play.  However, their bluffs are getting weaker by the day.

Good luck with your options.