Monthly Cash Machine Newsletter, Sunday, 04/09/2006 11:11:23 PM ET
APRIL RECOMMENDATION - USG
by Steve Gail
HAVING TROUBLE PRINTING?
The following issue is being added to our APRIL RECOMMENDED LIST
We are recommending a spread on the following issue
USG - USG Corporation, through its subsidiaries, engages in the manufacture and distribution of building materials. The company operates in three segments: North American Gypsum, Worldwide Ceilings, and Building Products Distribution. North American Gypsum segment manufactures and markets gypsum wallboards, cement boards, and fiber panels primarily in the United States, Canada, and Mexico. Its products are used for various building applications, such as interior walls, ceilings, and floors in residential, commercial, and institutional construction, as well as for industrial applications. Worldwide Ceilings segment manufactures and markets interior systems products worldwide.
We are recomemnding the following specific spread.
SELL UZO-PA USG APR $105.00 PUT CREDIT= $1.00
BUY UZO-PT USG APR $100.00 PUT DEBIT $0.55
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 $4,550.00
RETURN ON INVESTMENT= 9.89%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $5.00
STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $109
STOP LIMIT will be placed on the SHORT STRIKE PRICE:
UZO-PA STOP LIMIT EXIT >> = $2.25
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 this spread is filled it will bring our total positions to TWELVE (12)