Option Investor
Newsletter

ADDITIONAL FEBRAURY RECOMMENDED PLAYS

HAVING TROUBLE PRINTING?
Printer friendly version

We are adding the following 5 spread positions to our Monthly Cash Moachine February Recommended List

We are recommending spreads in the following companies:


SPW - SPX Corporation
provides cooling technologies and services, flow technology, industrial products and services, and technical products and systems. The company engineers, manufactures, and services cooling products for markets worldwide, including dry, wet, and hybrid cooling systems, cooling towers, and air-cooled condensers for power generation; refrigeration; heating, ventilating, and air conditioning equipment; and industrial markets. It also provides thermal components for power and steam generation plants and engineered services to maintain, refurbish, upgrade, and modernize power stations.

BSX - Boston Scientific Corporation
engages in the development, manufacture, and marketing of medical devices that are used in interventional medical specialties. The company's products are offered by two groups, Cardiovascular and Endosurgery. The Cardiovascular organization provides products and technologies for use in interventional cardiology, peripheral interventions, vascular surgery, electrophysiology, and neurovascular procedures.

CHK - Chesapeake Energy Corporation
engages in the acquisition, development, exploration, production, and marketing of oil and natural gas in the United States. It primarily operates in the mid continent region of the United States, which includes Oklahoma, western Arkansas, southwestern Kansas, and the Texas Panhandle. The company also has operations in the Permian Basin of western Texas and eastern New Mexico, in the Ark-La-Tex basin of eastern Texas and northern Louisiana, and in the south Texas and Texas Gulf coast regions.

QLGC - QLogic Corporation
engages in the design and supply of semiconductor and board level input/output (I/O) products, fabric switches, and enclosure management semiconductors. The company's I/O products provide an interface between computer systems and their attached data storage peripherals, such as hard disk drives, tape drives, removable disk drives, and
redundant array of inexpensive disks subsystems. Its products include hard disk controller chips, tape controller chips, enclosure management chips, host bus adapters, Fibre Channel blade switches, Fibre Channel stackable switches, and other fabric switches that provide the connectivity infrastructure for storage networks.

RMBS - Rambus, Inc.
provides chip interface products and services. Its memory interface product family includes XDR memory interface, RDRAM memory interface, and DDR controller interface technologies that provide an interface between memory chips and logic chips. The company's logic interface product family consists of serial link interfaces, RaSer X
interface, and FlexIO processor bus interface technologies, which provide an interface between two logic chips.

We are recommending the following specific two (2) call credit spreads and three (3) put credit spreads.

Call Spreads


SPW $46.66

BUY SPW-BX SPW FEB $52.50 CALL DEBIT = $0.10
SELL SPW-BJ SPW FEB $50.00 CALL CREDIT= $0.25
NET CREDIT = $0.15
INITIAL "NET- CREDIT TARGET= $0.15 or $15.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.15 = $150.00

MARGIN REQUIRE. (x 10 CONTRACTS $2,350.00
RETURN ON INVESTMENT= 6.38%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.50
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $48.33
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES
MAXIMUM EXPOSURE is: $2.50 Which is the difference between the strike prices
THIS WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON
THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS
AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED

BSX $23.42

BUY BSX-BY BSX FEB $27.50 CALL DEBIT = $0.15
SELL BSX-BE BSX FEB $25.00 CALL CREDIT= $0.40
NET CREDIT = $0.25
INITIAL "NET- CREDIT TARGET= $0.25 or $25.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.25 = $250.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,250.00
RETURN ON INVESTMENT= 11.11%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.50
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $24.21
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES
MAXIMUM EXPOSURE is: $2.50 Which is the difference between the strike prices
THIS WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON
THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS
AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED

Put Spreads

CHK $33.50

SELL CHK-NF CHK FEB $30.00 PUT CREDIT= $0.25
BUY CHK-NY CHK FEB $27.50 PUT DEBIT $0.10
NET CREDIT = $0.15
INITIAL "NET- CREDIT TARGET= $0.15 or $15.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.15 = $150.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,350.00
RETURN ON INVESTMENT= 6.38%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.50 $2.50
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $32.00
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES the Difference
IN THE STRIKE PRICE WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON
THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS
AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED

QLGC $38.01

SELL QLC-NG QLGC FEB $35.00 PUT CREDIT= $0.30
BUY QLC-NZ QLGC FEB $32.50 PUT DEBIT $0.10
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 = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.50
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $37.00
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES the Difference
IN THE STRIKE PRICE WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON
THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS
AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED

RMBS $34.01

SELL BNQ-NE RMBS FEB $25.00 PUT CREDIT= $0.70
BUY BNQ-ND RMBS FEB $20.00 PUT DEBIT $0.20
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 $4,500.00
RETURN ON INVESTMENT= 11.11%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $5.00
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $27.00
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES the Difference
IN THE STRIKE PRICE WILL BE OUR MAXIMUM EXPOSURE - WE WILL NOT USE STOPS ON
THOSE POSITIONS. THEY WILL GO ON THE WATCH LIST AND BE FOLLOWED WITH INSTRUCTIONS
AS TO HOW TO PROCEED OR/WHAT EXIT POINT NEEDS TO BE ESTABLISHED

3. IF THE DIFFERENCE BETWEEN THE SPREAD STRIKE PRICES IS 5 points or more the STOP LIMIT is below
and will be placed on the SHORT STRIKE PRICE:
BNQ-NE STOP LIMIT EXIT >> = $2.00
If and when the STOP LIMIT IS EXECUTED - A contingency order should be in place to than SELL the LONG SIDE
of the Spread and close the position with a Market Order if and when the SHORT side needs to be STOPPED OUT

If all of these five (5)positions are filled this will bring our February Recommended list to eight (8) positions.

Monthly Cash Machine Newsletter Archives