Monthly Cash Machine Newsletter, Tuesday, 02/21/2006 09:55:47 PM ET
ADDITIONAL PLAY TO ADD TO MARCH RECOMMENDED LIST - KOMG
by Steve Gail
HAVING TROUBLE PRINTING?
KOMG - AN ADDITIONAL MARCH RECOMMENDATION TO BE ADDED TO OUR SPREAD POSITIONS
We are recommending the following put credit spread in the issue below:
KOMG - Komag, Incorporated
engages in the design, manufacture, and marketing of thin-film media (disks) that are incorporated into disk drives. These drives are used to record, store, retrieve, and protect digital information. The company's products offer a range of coercivities, glide height capabilities, and other parameters to meet specific customer requirements. Komag sells its products to original equipment manufacturers in the disk drive market worldwide. The company was founded in 1983 and is headquartered in San Jose, California.
We are recommending the specific put play below:
SELL QKX-OI KOMG FEB $45.00 PUT CREDIT= $0.75
BUY QKX-OH KOMG FEB $40.00 PUT DEBIT $0.25
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
STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $47.00
MAXIMUM LOSS EXPOSURE IS $5.00 - the difference in the strike prices.
QKX-OI 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
When this spread is filled this will bring our MARCH RECOMMENDED LIST to Nine (9) positions.