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TWO NEW ADDITIONS TO THE MARCH RECOMMENDED LIST

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TWO CREDIT SPREADS ADDED TO RECOMMENDED LIST FOR MARCH.

Builders of residential property beginnining to level off.

So we are recommending credit spreads in the housing Industry on the following two (2) issues


KBH - KB Home
operates as a builder of single-family homes in the United States and France. The company operates in two segments, Construction and Financial Services. The Construction segment's activities include acquisition and development of land for residential purposes and offering a variety of homes for entry-level, move-up, luxury, and active adult homebuyers.


TOL - Toll Brothers Inc.
engages in the development, construction, financing, and sale of residential homes in the United States. It builds single-family detached and attached home communities, and master planned communities. The company's operations include development, architectural, engineering, mortgage, title, security monitoring, cable television, broadband Internet access, landscaping, lumber distribution, house component assembly, and manufacturing operations, as well as operate golf courses and country clubs.

We are recommending the following specific spreads:

CALL CREDIT SPREADS

KBH $68.05

BUY KBH-CP KBH MAR $80.00 CALL DEBIT = $0.10
SELL KBH-CO KBH MAR $75.00 CALL CREDIT= $0.30
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 $4,800.00
RETURN ON INVESTMENT= 4.17%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $71.53


When and the DIFFERENCE BETWEEN THE SPREAD STRIKE PRICES IS 5 points or more the STOP LIMIT is below
will be placed on the SHORT STRIKE PRICE:
KBH-CO STOP LIMIT EXIT >> = $1.20
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


TOL $32.65

BUY TOL-CH TOL MAR $40.00 CALL DEBIT = $0.05
SELL TOL-CG TOL MAR $35.00 CALL CREDIT= $0.35
NET CREDIT = $0.30
INITIAL "NET- CREDIT TARGET= $0.30 or $30.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.30 = $300.00

MARGIN REQUIRE. (x 10 CONTRACTS $4,700.00
RETURN ON INVESTMENT= 6.38%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $33.83

MAXIMUM EXPOSURE is: $5.00 Which is the difference between the strike prices

When THE DIFFERENCE BETWEEN THE SPREAD STRIKE PRICES IS 5 points or more the STOP LIMIT is below will be placed on the SHORT STRIKE PRICE:
TOL-CG STOP LIMIT EXIT >> = $1.40
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


With the CLOSING OF the NFI spreads,when these two positions are added this will bring our MARCH RECOMMENDED TOTAL to TEN (10) positions.



WATCH LIST CHANGES 2-27-06

HCA - remains on the WATCH LIST buy barely closes slightly above our
WATCH LIST target of $47.67 ( close of $47.77)

RYL & KOMG (removed from stock list)

RYL's
(removed) drop to $71.12 removes it off of out WATCH LIST

KOMG 's (removed) CLOSE above $47 ( close @ $47.59 ) removes it also from our WATCH LIST


CURRENT WATCH LIST UPDATE: as of 2-27-06

HCA - only issue on current WATCH LIST

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