Trade update- montpelier re (ticker MRH) is a good deal trading at $12.50 a share. Why? MRH is trading 20percent below its tangible book value of $15 per share. I have followed the company for 5 years and their investment portfolio is fairly low risk, which means the company could be liquidated at book value in a fairly short time period. At the very least, this suggests MRH is unlikely to decline much further, barring another hurricane like Katrina. Based on this, I am selling $10/ $12.50 puts for 1 month premiums of .25-1.00 (2-8pct one month returns), or up to a 96 percent annualized return. Alternatively, you could just buy the stock and write covered calls (sell the $12.50 call to generate income. I am ultimately more comfortable betting that MRH will not go down, versus betting that it will go up a lot