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MCM JANUARY 2007addition Recommendations

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We are recommending the following additions to our January 20007 RECOMMENDED list


We are recommending credit spreads in the following issues:


CAT - Caterpillar, Inc. manufactures construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company operates in three primary lines of business: machinery, engines, and financial products

FXI - iShares FTSE/Xinhua China 25 Index . The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index. The fund generally invests at least 90% of assets in the securities of the index or in ADRs, GDRs or EDRs representing securities in the index

NVDA - NVIDIA Corporation offers programmable graphics processor technologies worldwide. The company offers its products under four categories: graphics processing units (GPU), media and communications processors (MCP), handheld GPUs, and consumer electronics


We are recommending the following specific credit spreads:


PRICE
CAT $61.82

BUY CAT-AN CAT JAN $70.00 CALL DEBIT = $0.10
SELL CAT-AM CAT JAN $65.00 CALL CREDIT= $0.50
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: $63.00

EQUITY INDEXES
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
CAT-AM EXIT >> = $2.00 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

PRICE
FXI $101.00

SELL FJJ-MP FXI JAN $94.00 PUT CREDIT= $0.90
BUY FJJ-MN FXI JAN $92.00 PUT DEBIT $0.75
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 $1,850.00
RETURN ON INVESTMENT= 8.11%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.00
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $97.00
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

PRICE
NVDA $37.50

SELL UVA-MZ NVDA JAN $32.50 PUT CREDIT= $0.35
BUY UVA-MF NVDA JAN $30.00 PUT DEBIT $0.15
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 $2,300.00
RETURN ON INVESTMENT= 8.70%
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: $35.00
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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