Option Investor
Newsletter

Trade Alert - LEH

HAVING TROUBLE PRINTING?
Printer friendly version

A Big Day for Brokers!

Shares of Lehman Bothers (NYSE:LEH) are trading higher, up nearly 2% in conjunction with the strong rally in the financial sector. The upside activity has tested our stop-loss order (which triggers when the bid price for the stock is above $95.50) and will likely be executed by the end of the session. Traders who believe the rally will fail near the current resistance level should raise their stop-loss price to accommodate today's bullish momentum. Another alternative is to roll up and out to a new bearish spread with higher strike prices, while maintaining a credit in the overall position. The OCT-$110/OCT-$105 may be a viable candidate in this regard. Finally, a trader with a neutral to bullish outlook might consider purchasing the OCT-$95 calls to create a horizontal (calendar/time) spread, where the near-term options can be sold to reduce the basis of the long position. We'll post additional comments on the LEH spread after the closing bell.

MCM Staff

Monthly Cash Machine Newsletter Archives