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JUNE RECOMMENDATIONS BEGIN

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We are off with three (3) JUNE recommendations this week.

We are recommending spreads in the following 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. This segment also builds commercial projects and high-density residential properties, such as condominium complexes.

GM - General Motors Corporation (GM), together with its subsidiaries, primarily engages in the design, manufacture, and marketing of automotive products worldwide. The company operates through Automotive, and Financing and Insurance Operations (FIO) segments. The Automotive segment designs, manufactures, and markets passenger cars, including small, medium size, sport, and luxury cars; and trucks, including pickups, vans, utilities, and medium duty trucks.

PEIX - Pacific Ethanol, Inc. engages in the development, production, and marketing of renewable fuels in the western United States. Pacific Ethanol is constructing an ethanol production facility in Madera County, California, as well as developing four additional plants on the West Coast. Kinergy Marketing, LLC, the company's wholly owned subsidiary, is a West Coast based marketer of ethanol. In addition, the company engages in the identification and development of other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.


We are recommending the following specific spreads:

Call spreads:

KBH $57.80

BUY KBH-FN KBH JUN $70.00 CALL DEBIT = $0.20
SELL KBH-FM KBH JUN $65.00 CALL CREDIT= $0.60
NET CREDIT = $0.40
INITIAL "NET- CREDIT TARGET= $0.40 or $40.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.40 = $400.00

MARGIN REQUIRE. (x 10 CONTRACTS $4,600.00
RETURN ON INVESTMENT= 8.70%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $61.40

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

2. IF 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-FM STOP LIMIT EXIT >> = $2.40
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


DNA $78.70

BUY DWN-FR DNA JUN $90.00 CALL DEBIT = $0.30
SELL DWN-FQ DNA JUN $85.00 CALL CREDIT= $0.80
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
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $81.85

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


2. IF 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:
DWN-FQ STOP LIMIT EXIT >> = $2.50
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


Put spreads:

PEIX $42.00

SELL PFQ-RF PEIX JUN $30.00 PUT CREDIT= $0.80
BUY PFQ-RE PEIX JUN $25.00 PUT DEBIT $0.40
NET CREDIT = $0.40
INITIAL "NET- CREDIT TARGET= $0.40 or $40.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.40 = $400.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,600.00
RETURN ON INVESTMENT= 8.70%

1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $36.00

EXIT STRATEGY =1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $5.00


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


STOP LIMIT will be placed on the SHORT STRIKE PRICE:
PFQ-RF 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


Wne these positions are filled this will start off our JUNE recommendations with three (3) positions

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