Monthly Cash Machine Newsletter, Monday, 09/03/2007 12:28:17 PM ET
MCM September 2007 recommendations 9-03-07
by Steve Gail
HAVING TROUBLE PRINTING?
We are adding the following recommendations to our SEPTEMBER recommended list
We are recommending credit spreads in the following issues:
AMZN - Amazon.com, Inc. operates retail Web sites, as well as provides programs that enable third parties to sell products on its Web sites. The company sources and sells a range of products to its customers.
POT - Potash Corporation of Saskatchewan, Inc. (PotashCorp) engages in the production and sale of fertilizers, and related industrial and feed products. The company manufactures and sells solid and liquid phosphate fertilizers; animal feed supplements; and industrial acid, which is used in food products and industrial processes. It produces potash from six mines in Saskatchewan and one mine in New Brunswick.
We are recommending the following specific credit spreads:
Put credit spreads ( bullish credit spread )
|SELL ZQN-UD AMZN SEP $72.50 PUT CREDIT= $0.65
BUY ZQN-UN AMZN SEP $70.00 PUT DEBIT $0.45
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: $76.00
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
|SELL PVZ-UP POT SEP $80.00 PUT CREDIT= $0.75
BUY PVZ-UW POT SEP $76.625 PUT DEBIT $0.50
NET CREDIT = $0.25
INITIAL "NET- CREDIT TARGET= $0.25 or $25.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.25 = $250.00
MARGIN REQUIRE. (x 10 CONTRACTS $3,150.00
RETURN ON INVESTMENT= 7.94%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $3.375
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE DROPS TO: $85.00
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:
POT POSITION STOP BELOW
PVZ-UP STOP LIMIT EXIT >> = $2.50
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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