Option Investor

Trade Alert - PIXR

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Another Giant Falls!

One of our bullish positions; Pixar (NASDAQ:PIXR), finally succumbed to the broad selling pressure in equities today. The issue has moved below $45.75 on an intraday basis, which is our (split-adjusted) loss-limit point in the issue, thus traders should consider an early exit in the position.

Since the original play involved 5 contracts, the transaction to close the spread requires the purchase of:

(10) MAY-45.00 Puts PQJ-QI

and the sale of:

(10) MAY-42.50 Puts PQJ-QV

The current net-debit to close the spread is approximately $0.70-$0.75, however the exit trade might be improved through the use of individual orders.

Although we had hoped PIXR would be able to successfully oppose the bearish onslaught, a similar fate has recently befallen positions in Black & Decker (NYSE:BDK) and Sealed Air (NYSE:SEE), so the only remaining bullish spreads in the MCM Portfolio are Mentor (NYSE:MNT) and Genentech (NYSE:DNA). Considering today's activity, it seems prudent to keep a close watch on these issues as we try to find some new candidates to offset the recent losses.

MCM Staff

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