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MCM DJX CREDIT SPREAD RECOMMENDATION 512-08

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Okay, let' see if we can put on the CALL side of our DJX Monthly Cash Machine credit spread

We are recommending the following call credit spread for our Monthly Cash Machine June 2008 position.

We are recommending the following specific call credit spread on the DJX

Remember:
With the right broker you should not have any additional margin requirements if
you have the put credit spread we put on last week.


^DJX $128.76

BUY DJY-FH ^DJX JUN $138.00 CALL DEBIT = $0.10
SELL DJW-FF ^DJX JUN $136.00 CALL CREDIT= $0.21
NET CREDIT = $0.11
 

INITIAL "NET- CREDIT TARGET= $0.11 or $11.00
POTENTIAL PROFIT ( X 50 CONTRACTS @ $0.11 = $550.00
MARGIN REQUIRE. 50 CONTRACTS $9,450.00
RETURN ON INVESTMENT= 5.82%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE RAISES TO: $132.00

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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