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NEW MCM DJX APRIL 2008 credit spread 3-13-08

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DJX APRIL PUT CREDIT SPREAD:

Our DJX March position looks pretty good with 5 trading days left and our position being over 1,000 DJIA points out of the money.

It is time to put on an DJX APRIL position.

We are going to put on our APRIL DJX credit spread starting on the put side. I do not believe by any stretch of the imagination that this economy is out of the woods regarding the current and on going problems. I think we might go lower, but I want to put on a position for APRIL now ,so if we get a bounce I will be putting on the short DJX APRIL call spread as well. In addition, if we do not get a bounce I will be examining when to put on the APRIL DJX Call spread anyway.

In the mean time here is the position recommendation for our DJX play for April.
Please keep in mind I will be examining the call side for a DJX position in April as we speak.

We are recommending the following specific credit spread for our DJX April position.

Put Credit Spread - ( Bullish Call Spread )

DJX $121.46

SELL DJV-PB DJX FEB $106.00 PUT CREDIT= $0.40
BUY DJV-PZ DJX FEB $104.00 PUT DEBIT $0.28
NET CREDIT = $0.12

INITIAL "NET- CREDIT TARGET= $0.12 or $12.00
POTENTIAL PROFIT (x 10 50 CONTRACTS @ $0.12 = $600.00
MARGIN REQUIRE. 50 CONTRACTS $9,400.00
RETURN ON INVESTMENT= 6.38%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE DROPS TO: $112.00

DIFFERENCE IN THE STRIKE PRICES 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



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