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ADDITIONAL FEBRUARY RECOMMENDATIONS 1-21-07

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

We are recommending credit spreads on the following issues:

MER - Merrill Lynch & Co., Inc. is one of the world's leading financial management and advisory companies with offices in numerous countries.

IDCC - NTERDIGITAL COMMUNICATIONS develops and markets advanced digital wireless telecommunications systems using proprietary technologies for voice and data communications and has developed an extensive patent portfolio related to those technologies.

FD - Federated Department Stores, through its subsidiaries, is one of the leading operators of full-line department stores in the United States. The Company's subsidiaries operate department stores under the names Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's, Rich's and Stern's.

We are recommending the following specific credit spreads

Put credit spreads

MER $95.87

SELL MER-NR MER FEB $90.00 PUT CREDIT= $0.45
BUY MER-NQ MER FEB $85.00 PUT DEBIT $0.15
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 $5.00
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $93.00
2.EQUITY ISSUES
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:
MER POSITION STOP BELOW
MER-NR STOP LIMIT EXIT >> = $1.65
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


IDCC $34.01

SELL DAQ-NF IDCC FEB $30.00 PUT CREDIT= $0.50
BUY DAQ-NE IDCC FEB $25.00 PUT DEBIT $0.20
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 $5.00
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $32.00
2.EQUITY
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:
IDCC POSITION STOP BELOW
DAQ-NF STOP LIMIT EXIT >> = $1.75
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


FD $40.22

SELL FD-NU FD FEB $37.50 PUT CREDIT= $0.30
BUY FD-NG FD FEB $35.00 PUT DEBIT $0.10
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: $38.50
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 T HOSE 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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