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Additional MCM October recommendations 10-08-07

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We are adding following recommendations to our OCTOBER positions

We are recommending credit spreads in the following issues:


MDC - M.D.C. HOLDINGS, INC. is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in its homebuilding activities and sale to others, in the Denver, Phoenix, Maryland, Virginia, mid Atlantic region, Las Vegas, Dallas, California metropolitan areas. They are also is involved in real estate brokerage, property management, condominium conversions and fee construction of apartment and commercial buildings.

MHK - Mohawk Industries, Inc. is one of the leading producers of woven and tufted broadloom carpet and rugs for principally residential applications. The company designs, manufactures and markets carpet and rugs in a broad range of colors, textures and patterns. The company is widely recognized through its premier brand names, some of which are Mohawk, Aladdin, American Rug Craftsmen, American Weavers, Bigelow, and Custom Weave.

CROX - Crocs, Inc. is a rapidly growing designer, manufacturer and marketer of footwear for men, women and children under the CROCS brand. All of the Company's footwear products incorporate its proprietary closed-cell resin material, which the Company believes represents a substantial innovation in footwear comfort and functionality.

POT - Potash Corporation of Saskatchewan Inc. is the world's largest potash company, the third largest phoshate producer and the second largest nitrogen producer in the world. Behind its growing success lies a vital infrastructure: knowledgeable PCS Sales staff throughout Canada and the United States, a transportation network that includes truck, train, barge, lake ship and ocean vessel, and warehouses strategically located in major consuming areas

We are recommending the following specific credit spreads.

Call credit spreads ( bearish call spreads )


MDC $43.04

BUY MDC-JJ MDC OCT $50.00 CALL DEBIT = $0.10
SELL MDC-JI MDC OCT $45.00 CALL CREDIT= $0.45
NET CREDIT = $0.35
 

INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.35 = $350.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,650.00
RETURN ON INVESTMENT= 7.53%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $44.25
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:
BUY POSITION STOP BELOW
MDC-JI EXIT >> = $1.80 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


MHK $84.43

BUY MHK-JS MHK OCT $95.00 CALL DEBIT = $0.40
SELL MHK-JR MHK OCT $90.00 CALL CREDIT= $0.75
NET CREDIT = $0.35
 

INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.35 = $350.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,650.00
RETURN ON INVESTMENT= 7.53%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $87.50
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:
BUY POSITION STOP BELOW
MHK-JR EXIT >> = $3.00 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


Put credit spreads ( bullish credit spreads )


CROX $67.68

SELL CQJ-VL CROX OCT $60.00 PUT CREDIT= $0.45
BUY CQJ-VK CROX OCT $55.00 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: $65.00
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:
CROX POSITION STOP BELOW
CQJ-VL 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

POT $105.00

SELL PYP-VS POT OCT $95.00 PUT CREDIT= $0.70
BUY PYP-VR POT OCT $90.00 PUT DEBIT $0.35
NET CREDIT = $0.35
 

INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.35 = $350.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,650.00
RETURN ON INVESTMENT= 7.53%
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: $100.00
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
PYP-VS STOP LIMIT EXIT >> = $3.00
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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