Monthly Cash Machine Newsletter, Sunday, 12/11/2005 11:43:15 AM ET
Initial January recommendations for Monthly Cash Machine
by Steve Gail
HAVING TROUBLE PRINTING?
Initial January Expiration Recommendations
We are recommending spreads on the following four (4) issues:
POT - Potash Corporation of Saskatchewan, Inc.
produces fertilizer, and related industrial and feed products. The company produces potash, phosphate, and nitrogen products. It produces potash for use as fertilizer from six mines in Saskatchewan and one mine in New Brunswick. Its phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, animal feed supplements, and purified phosphoric acid, which are used in food products and industrial processes.
TOL - Toll Brothers, Inc.
engages in the development, construction, financing, and sale of residential homes in the United States. It builds luxury single-family detached and attached home communities; master planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities principally on land it develops and improves.
CLF - Cleveland-Cliffs, Inc.
produces iron ore pellets in North America. The company manages and owns interests in North American mines; and owns ancillary companies, providing transportation and other services to the mines. It operates six iron ore mines located in Michigan, Minnesota, and eastern Canada.
QSII- Quality Systems, Inc.
and its subsidiary NextGen Healthcare Information Systems, Inc. engage in the
development and marketing of healthcare information systems that automate medical and dental group practices, community health centers, physician hospital organizations, management service organizations, and dental schools
We are recommending the following four (4) spreads for the January Expiration. We are recommending two (2) call credit spreads and two (2) put credit spreads.
Call Credit Spreads
BUY POT-AS POT Jan $95.00 CALL DEBIT = $0.45
SELL POT-AR POT Jan $90.00 CALL CREDIT= $0.80
NET CREDIT = $0.35
INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.35 = $350.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,650.00
RETURN ON INVESTMENT= 7.53%
EXIT STRATEGY =NET DEBIT STOP = $1.40
BUY TOL-AV TOL Jan $42.50 CALL DEBIT = $0.25
SELL TOL-AH TOL Jan $40.00 CALL CREDIT= $0.45
NET CREDIT = $0.20
INITIAL "NET- CREDIT TARGET= $0.20 or $20.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.20 = $200.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,300.00
RETURN ON INVESTMENT= 8.70%
EXIT STRATEGY =NET DEBIT STOP = $0.80
PUT Credit spreads
SELL CLF-MP CLF Jan $80.00 PUT CREDIT= $0.90
BUY CLF-MO CLF Jan $75.00 PUT DEBIT $0.45
NET CREDIT = $0.45
INITIAL "NET- CREDIT TARGET= $0.45 or $45.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.45 = $450.00
MARGIN REQUIRE. (x 10 CONTRACTS $5,450.00
RETURN ON INVESTMENT= 8.26%
EXIT STRATEGY =NET DEBIT STOP = $1.80
SELL QCR-MO QSII Jan $75.00 PUT CREDIT= $1.40
BUY QCR-MN QSII Jan $70.00 PUT DEBIT $0.90
NET CREDIT = $0.50
INITIAL "NET- CREDIT TARGET= $0.50 or $50.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.50 = $500.00
MARGIN REQUIRE. (x 10 CONTRACTS $5,500.00
RETURN ON INVESTMENT= 9.09%
EXIT STRATEGY =NET DEBIT STOP = $2.00
We will be adding more positions as the week progresses