A hybrid collar option play on Bucyrus was mentioned on Geldpress at this link last week.  The idea was to put a collar around Bucyrus and protect against a potential decline in February earnings.  The Bucyrus collar mentioned was the following:

  • Purchase shares in Bucyrus
  • Sell March covered CALLS
  • Buy February PUTS, for much cheaper than the March covered call premiums.

And the idea was to WAIT on buying the February Puts because of a perceived and imminent decrease in implied volatility.  That’s the “hybrid” portion of the collar – timing the individual components of the option play.

Well, as of today, the protective PUTS on Bucyrus are significantly cheaper than they were after the play was first mentioned.   Take a look at the February 15 PUTS on Bucyrus, which can be had for just $50-$55 (previously $80-$120) per contract as of today.

bucy-feb


Disclaimer: Trade at your own risk!