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INITIAL MCM FEBRUARY 2008 recommendations 1-12-08

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We are recommending the following credit spreads to begin the FEBRUARY expiration cycle.

We are recommending credit spreads in the following issues:

CROX - Crocs, Inc. and its subsidiaries design, develop, and manufacture consumer products from specialty resins worldwide. It offers footwear for men, women, and children under the crocs brand. The company also offers apparel and accessories, including t-shirts, sweatshirts, hats, beanies, and socks. In addition, it manufactures spa pillows for the home spa market; seats and pads for use in kayaks and canoes; and scuba diving fins for other water sports products, as well as produces and distributes hockey and lacrosse equipment

TGT - Target Corporation engages in the operation of general merchandise and food discount stores in the United States. It offers an assortment of general merchandise, including consumables and commodities; electronics, entertainment, sporting goods, and toys; apparel and accessories; and home furnishings and decor; as well as a line of food items. The company operates its stores under Target and SuperTarget brands. It also serves its customers through online.

IYR - iShares Dow Jones US Real Estate

WRNC - Warnaco Group Inc is a leading manufacturer of intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear, better dresses, fragrances and accessories sold under such brands as Warner's, Olga, Lejaby, Bodyslimmers, Chaps by Ralph Lauren, Calvin Klein men's and women's underwear, men's accessories, and men's, women's, junior women's and children's jeans, Speedo/Authentic Fitness men's, women's and children's swimwear, sportswear and swimwear accessories, Polo by Ralph Lauren women's and girls' swimwear, and Anne Cole Collection.

We are recommending the following specific credit spreads

Call Credit Spreads ( bearish call spreads )


CROX $28.94

BUY CQJ-BI CROX FEB $45.00 CALL DEBIT = $0.50
SELL CQJ-BH CROX FEB $40.00 CALL CREDIT= $0.80
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: $37.50
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
CQJ-BH EXIT >> = $3.20 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

TGT $49.95 ( PLEASE NOTE WE ARE DOING 20 CONTRACTS FOR TGT)

BUY TGT-BL TGT FEB $60.00 CALL DEBIT = $0.30
SELL TGT-BY TGT FEB $57.50 CALL CREDIT= $0.50
NET CREDIT = $0.20
 

INITIAL "NET- CREDIT TARGET= $0.20 or $20.00
POTENTIAL PROFIT (x 20 CONTRACTS @ $0.20 = $400.00
MARGIN REQUIRE. (x 20 CONTRACTS $4,600
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: $53.00
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


IYR $61.24

BUY IYR-BT IYR FEB $72.00 CALL DEBIT = $0.30
SELL BHW-BQ IYR FEB $69.00 CALL CREDIT= $0.55
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 $2,750.00
RETURN ON INVESTMENT= 9.09%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $65.00
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

INDEX OPTIONS, ISHARES, ETF's AND HOLDER ISSUES:
In ADDITION IF WE ARE USING ANY OF THE ABOVE WE WILL RECOMMEND WHEN A STOP SHOULD BE ADDED, IF THAT TIME BECOMES NECESSARY

WRNC $31.15

BUY QDC-BH WRNC FEB $40.00 CALL DEBIT = $0.30
SELL QDC-BG WRNC FEB $35.00 CALL CREDIT= $0.80
NET CREDIT = $0.50
 

INITIAL "NET- CREDIT TARGET= $0.50 or $50.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.50 = $500.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,500.00
RETURN ON INVESTMENT= 11.11%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $33.00
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:
BUY POSITION STOP BELOW
QDC-BG EXIT >> = $3.20 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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