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Additional MCM APRIL 2008 recomemndations 3-30-08

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We are adding the following 3 credit spreads to our APRIL recommended list.

We are recommending spreads in the following issues:


XL - LX Capital Limited, through its subsidiaries, provides excess liability insurance coverage to industrial, commercial and other enterprises, directors and officers of such enterprises, professional firms, high excess property coverage, and the assumption of reinsurance contracts on a worldwide basis




Commentary

XL - pressure from financial guarantee markets. Wrote down 46% of security capital assurance (SCA) high risk portfolio in 2007 and additionally may incur risks form reinsurance claims later in the following quarters


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KLAC - KLA-Tencor Corporation is one of the world's leading suppliers of process control and yield management solutions for the semiconductor and related microelectronics industries. Its comprehensive portfolio of products, software, analysis, services and expertise is designed to help integrated circuit manufacturers manage yield throughout the entire wafer fabrication process.






Commentary:

KLAC - nothing unique, this is an old favorite from a month ago, that has felt the wrath of a slowdown in the economy. The next 3 weeks before earnings should do nothing to improve that situation.

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DDM - ULTRA DOW30 PROSHARES (DDM)


Commentary:

DDM - same market outlook for Proshares as the Dow, trading range bound.

We are recommending the following specific credit spreads

Call credit spreads (bearish credit spreads)


XL $29.50

BUY XL-DH XL APR $40.00 CALL DEBIT = $0.40
SELL XL-DG XL APR $35.00 CALL CREDIT= $0.70
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
XL-DG 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

KLAC $36.91

BUY KCQ-DV KLAC APR $42.50 CALL DEBIT = $0.15
SELL KCQ-DH KLAC APR $40.00 CALL CREDIT= $0.35
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
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $37.50
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

DDM $71.14

BUY DDM-DA DDM APR $79.00 CALL DEBIT = $0.55
SELL DDM-DY DDM APR $77.00 CALL CREDIT= $0.75
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 $1,800.00
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: $74.50
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, ETFS AND HOLDER ISSUES:
IN ADDITION IF WE ARE USING A INDEX OR HOLDER OPTION WE WILL RECOMMEND WHEN A STOP SHOULD BE ADDED, IF THAT TIME BECOMES NECESSARY




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