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MCM MAY 2008 DJX recommendation 4-10-08

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DJX MAY CALL CREDIT SPREAD:

Our APR DJX positions look pretty good with 5 trading days left and the put and call spreads are trading for less then $0.05.

So It is time to put on our DJX MAY position(s).

We are going to attempt to put on both sides of the MAY DJX credit spread so you will get the both put side.and the call side recommendation. If the market can stay in the trading range tomorrow we might be able to get both sides executed.If not, we should get at least one and look to fill the other side later.

In the mean time here are the positions being recommended for our DJX play for MAY.


We are recommending the following specific credit spreads for our DJX MAY position.

Remember with the right broker you will only have a margin requirement placed on one of the two sides


Call credit spread ( bearish call spread )


^DJX $125.82

BUY DJY-EG ^DJX MAY $137.00 CALL DEBIT = $0.06
SELL DJW-EE ^DJX MAY $135.00 CALL CREDIT= $0.19
NET CREDIT = $0.13

INITIAL "NET- CREDIT TARGET= $0.13 or $13.00
POTENTIAL PROFIT ( X 50 CONTRACTS @ $0.13 = $650.00
MARGIN REQUIRE. 50 CONTRACTS $9,350.00
RETURN ON INVESTMENT= 6.95%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.00
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE RAISES TO: $131.00

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

Put Credit Spread - ( Bullish put Spread )


^DJX $125.82

SELL DJV-QH ^DJX MAY $112.00 PUT CREDIT= $0.30
BUY DJV-QF ^ DJX MAY $110.00 PUT DEBIT $0.21
NET CREDIT = $0.09

INITIAL "NET- CREDIT TARGET= $0.09 or $9.00
POTENTIAL PROFIT (x 10 50 CONTRACTS @ $0.09 = $450.00
MARGIN REQUIRE. 50 CONTRACTS $9,550.00
RETURN ON INVESTMENT= 4.71%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $2.00.
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE DROPS TO: $118.00

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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