Option Investor
Newsletter

Additional MCM APRIL 2008 recommendations 3-23-08

HAVING TROUBLE PRINTING?
Printer friendly version

We are looking to add the following positions to our APRIL recommended list

We are recommending credit spreads in the following issues

XLB - MATERIALS SELECT SECTOR (XLB) Spiders




Commentary

XLB - Overall economic downturn has this sector pressured for the immediate future.

-------------------------------------------------------------------------------------------------------------------------------

AMGN - Amgen Inc
. discovers, develops and delivers innovative human therapeutics. A biotechnology pioneer, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, and other serious illnesses.





Commentary

AMGN - stagnent revenue and FDA's concern over Amgen's ESA drugs wil hold a cloud on growth potential of this issue

--------------------------------------------------------------------------------------------------------------------------

DLB - Dolby Laboratories develops and delivers products and technologies that make the entertainment experience more realistic and immersive. For nearly four decades, Dolby has been at the forefront of defining high-quality audio and surround sound in cinema, broadcast, home audio systems, cars, DVDs, headphones, games, televisions, and personal computers. Based in San Francisco with headquarters in England, the company has entertainment industry liaison offices in New York and Los Angeles, and licensing liaison offices in London, Shanghai, Beijing, Hong Kong, and Tokyo.




Commentary

DLB - slow down in consumer spending especially in electronics will have at least a short term effect on Dolby's growth for the next 2 quarters

-------------------------------------------------------------------------------------------------------------------------------

VIP - Vimpel-Communications
is a provider of telecommunications services in Russia,




Commentary

VIP - Economic as well as political instability in Russia and higher tax liability due to deductibility expenses of subidiary KP inpulse will effect VIP's bottom line. An additionsl issue of currency flucuation will also hamper its expected growth from Ukraine revenue.

---------------------------------------------------------------------------------------------------------------------------

We are recommending the following specific credit spreads

(Call Credit Spreads - Bearish Credit Spreads)

XLB $38.30

BUY XLB-DU XLB APR $47.00 CALL DEBIT = $0.05
SELL XLB-DP XLB APR $42.00 CALL CREDIT= $0.35
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: $40.00
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. IN ADDITION ETF'S, HOLDERS and other INDEXES WILL NOT HAVE A STOP ESTABLISHED AT THIS TIME, BUT YOU WILL BE INFORMED IF ANY ACTION IS NEEDED.

AMGN $40.11

BUY AMQ-DJ AMGN APR $50.00 CALL DEBIT = $0.12
SELL AMQ-DI AMGN APR $45.00 CALL CREDIT= $0.47
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: $42.50
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
AMQ-DI EXIT >> = $2.25 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


DLB $35.70

BUY DLB-DI DLB APR $45.00 CALL DEBIT = $0.25
SELL DLB-DH DLB APR $40.00 CALL CREDIT= $0.75
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: $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
DLB-DH 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

VIP $29.84

BUY VIQ-DH VIP APR $40.00 CALL DEBIT = $0.20
SELL VIQ-DG VIP APR $35.00 CALL CREDIT= $0.50
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: $32.50
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
VIQ-DG EXIT >> = $2.25 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



Orders to purchase or sell securities through your account with optionsXpress, Inc., an independent registered broker-dealer ("optionsXpress"), shall be accepted and executed solely by optionsXpress, subject to the terms and conditions of your individual account agreement with optionsXpress. optionsXpress makes no investment recommendations and does not provide financial, tax or legal advice. All inquiries regarding your optionsXpress account, including any disputes or trading errors, should be directed to optionsXpress. Option Investor, Inc is not a registered broker-dealer and is not in the business of transacting trades. Furthermore, Option Investor, Inc is not a registered investment adviser, does not provide financial, tax or legal advice, and is not recommending that you buy or sell any particular security. optionsXpress has made its services available to you via Option Investor, Inc as a courtesy. optionsXpress and Option Investor, Inc are separate and unrelated entities. optionsXpress is not affiliated with and does not endorse or warrant the products or services of Option Investor, Inc.

Monthly Cash Machine Newsletter Archives