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ADDITIONAL OCTOBER RECOMMENDATIONS -9-30-06

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We are recommending the following three (3) credit spreads to our OCTOBER recommendation list:

We are recommending credit spreads on the following issues:


MUR - Murphy Oil Corporation is a worldwide oil and gas exploration and production company with refining and marketing operations in the United States and the United Kingdom and crude oil transportation and trading operations in Canada.

SII - Smith International, Inc. is a worldwide supplier of premium products and services to the oil and gas exploration and production industry, the petrochemical industry and other industrial markets.

GM - General Motors Corp. designs, manufactures, and markets automotive vehicles. General Motors also has substantial interests in digital communications, financial and insurance services, locomotives, and heavy-duty automatic transmissions.

We are recommending the following specific credit spreads

Call credit spreads


MUR $47.55

BUY MUR-JK MUR OCT $55.00 CALL DEBIT = $0.10
SELL MUR-JJ MUR OCT $50.00 CALL CREDIT= $0.40
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: $48.50
2. A STOP LIMIT will be placed on the SHORT STRIKE PRICE on any EQUITY OPTION that has a STRIKE PRICE DIFFERENCE OF $5.00 or MORE.
THE STOP LIMIT ON THIS POSITION IS NOTED BELOW:
BUY POSITION STOP BELOW

MUR-JJ EXIT >> = $1.60 STOP LIMIT
If and when the STOP LIMIT IS EXECUTED - A contingency order should be in place to then 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

SII $38.80

BUY SII-JI SII OCT $45.00 CALL DEBIT = $0.10
SELL SII-JS SII OCT $42.50 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
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $40.00
2. ON SPREADS WITH 2.50 or less difference in STRIKE PRICES
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 credit spreads

GM $33.26

SELL GM-VF GM OCT $30.00 PUT CREDIT= $0.30
BUY GM-VY GM OCT $27.50 PUT DEBIT $0.15
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 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



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