mon 5/26/2008 1:29pm

it's memorial day and nearly the mid point of the year.

time to find some income producing ideas.

1st, let's see what the risk free rates are to 2009 and 2010

6m to jan 2009 about 1.95%

18m to jan 2010 about 2.29%

these are rates we need to beat.

let's use aapl in a trade

aapl closed friday at 181.17

income trade #1

let's buy 100 shares at 181.17, so -18,117

let's sell the jan 2010 180 calls for 46.30, so +4,630

let's do a married put with the shares, buy the jan 2010 180 puts for 38.90, so -3,890

in the above married trade or "collar" trade as some call it, the return to jan 2010 is:

(4630-117-3890)/18117 or +3.44%, compares to 2.29%

income trade #2

let's buy 100 shares at 181.17, so -18,117

let's sell the jan 2010 180 calls for 46.30, so +4,630

let's do a married put with the shares, buy the jan 2009 180 puts for 25.00, so -2,500

in the above married trade or "collar" trade as some call it, the return to jan 2010 is:

(4630-117-2500)/18117 or +11.11%, compares to 1.95%

obviously, your shares have to be unwound at the end of each option expiration.

paul