Monthly Cash Machine Newsletter, Friday, 06/13/2008 02:53:40 AM ET
MCM JULY 2008 DJX credit spread 6-12-08
by Steve Gail
HAVING TROUBLE PRINTING?
MCM JULY 2008 DJX credit spread position
I decided to wait until awfully late before I decided rather to put on the call side of our DJX for tomorrow's open. But I decided to: for Friday's opening
Let's begin our JULY 2008 recommendation off by starting with our JULY 2008 DJX credit spread on the call side.
We are recommending the following specific DJX call credit spread for July
` ^DJX $121.42
|BUY DJW-GD ^DJX JULY $134.00 CALL DEBIT = $0.06 |
SELL DJW-GA ^DJX JULY $131.00 CALL CREDIT= $0.16
NET CREDIT = $0.10
INITIAL "NET- CREDIT TARGET= $0.10 or $10.00
POTENTIAL PROFIT ( X 50 CONTRACTS @ $0.10 = $500.00
MARGIN REQUIRE. 50 CONTRACTS $14,500.00
RETURN ON INVESTMENT= 3.45%
EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE $3.00
1. INDEX WILL BE PLACED ON WATCH LIST IF INDEX PRICE RAISES TO: $127.00
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
We may decide to put on the PUT side of this trade later on next week. A lot will have to do with the disposition of oil prices. Buf for right now we are putting on only the call side.
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