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MCM FEBRUARY 2007 - WATCH LIST 1-17-07

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We are recommending the following 3 credit spreads to our FEBRUARY RECOMMENDED LIST.

We are recommending credit spreads on the following issues:

BBY - Best Buy operates in a single business segment, selling personal computers and other home office products, consumer electronics, entertainment software, major appliances and related accessories principally through its retail stores

CMTL - Comtech Telecommunications Corp. designs, develops, produces and markets sophisticated wireless telecommunications transmission products and solid state high power broadband amplifiers for commercial and government purposes.

CRDN - CERADYNE, INC. develops, manufactures and markets advanced technical ceramic products and components for industrial, defense, consumer and microwave applications. In many high performance plications, products made of advanced technical ceramics meet specifications that similar products made of metals or plastics cannot achieve


We are recommending the following specific credit spreads

Call Credit Spreads


BBY $48.65

BUY BBY-BK BBY FEB $55.00 CALL DEBIT = $0.20
SELL BBY-BX BBY FEB $52.50 CALL CREDIT= $0.40
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
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $50.00
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

CMTL $36.50

BUY CQH-BI CMTL FEB $45.00 CALL DEBIT = $0.10
SELL CQH-BH CMTL FEB $40.00 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: $38.50
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
CQH-BH 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


CRDN $53.51

BUY AUE-BM CRDN FEB $65.00 CALL DEBIT = $0.20
SELL AUE-BL CRDN FEB $60.00 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: $56.50
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
AUE-BL 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







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