Great OXPS Plays

We profit from common stock and options trading.

By Wall Street Media on MSN Money Dec 14, 2010 4:10PM

Written by Douglas Estadt

 

Today, we take a closer look at a unique and profitable scenario involving optionsXpress Holdings, Inc. (Nasdaq:OXPS), a web-based brokerage company.  Investors may stand to profit from the simultaneous trading of OXPS common stock and options.  Common stock shareholders will be paid a substantial dividend provided that they own the stock before December 27th.  This dividend will then likely spark a sell off that will, in turn, benefit options traders as the put value increases.  The plays from which we’ll profit are as follows:

  • Purchasing the common stock, which is currently around 19.50, will pay a one-time dividend of 4.50 come the end of December
  • January 20 put is trading at 1.20; as the stock will likely sell off following the 4.50 pay out, the put will become increasingly valuable and so we will be buying 3x as many of these as we bought common shares.

For more on OXPS, view today's show:

 

 

Visit Wall Street Media. We feature exclusive insights from the world's leading transparent investors.

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
275
275 rated 2
482
482 rated 3
656
656 rated 4
643
643 rated 5
650
650 rated 6
638
638 rated 7
485
485 rated 8
281
281 rated 9
127
127 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
HPQHEWLETT PACKARD CO10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.