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MCM MAY 2008 DJX TRADE RECOMENDATION 4-16-08

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DJX MAY CALL CREDIT SPREAD RECOMMENDATION:

We are adding the following call credit spread to our DJX monthly Cash Machine MAY position. This spread will give us an iron condor on the DJX and with the right broker will not cost you anymore margin requirement to place since you already have a put credit spread in place already .on the DJX.
We are recommending the following specific credit spread.

Call credit spread ( bearish call spread )


^DJX $126.19


BUY DJW-EE ^DJX MAY $135.00 CALL DEBIT = $0.12
SELL DJW-EC ^DJX MAY $133.00 CALL CREDIT= $0.25
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: $130.00

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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