Option Investor
Newsletter

Additional recommendations for MCM AUGUST 2008 7-19-08

HAVING TROUBLE PRINTING?
Printer friendly version


We are adding the following candidates to our monthly cash machine AUGUST 2008 recommended list.

We are recommending credit spreads in the following issues:

VIP - Vimpel-Communications is a provider of telecommunications services in Russia,

MER - Merrill Lynch & Co., Inc. is one of the world's leading financial management and advisory companies with offices in numerous countries. The firm is a global underwriter and market maker of debt and equity securities and a strategic advisor to corporations, governments, institutions, and individuals worldwide.

TGT - Target Corporation operates large-store general merchandise formats, including discount stores, moderate-priced promotional and traditional department stores. They provide exceptional value to consumers through multiple retail formats ranging from upscale discount and moderate-priced to full-service department stores under the following names: Target, Mervyn's California, Dayton's, Marshall Field's, and Hudson's.

HON - Honeywell International is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control technologies for buildings, homes and industry, automotive products, power generation systems, specialty chemicals, fibers, plastics and electronic and advanced materials. Its operations are conducted by strategic business units, which have been aggregated under four reportable segments: Aerospace Solutions, Automation & Asset Management, Performance Materials and Power & Transportation Products

We are recommending the following specific credit spreads

Call credit spreads ( bearish call spreads )

VIP $27.20

BUY VIQ-HG VIP AUG $35.00 CALL DEBIT = $0.10
SELL VIQ-HF VIP AUG $30.00 CALL CREDIT= $0.45
NET CREDIT = $0.35

INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.35 = $350.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,650.00
RETURN ON INVESTMENT= 7.53%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $28.50
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
VIQ-HF EXIT >> = $2.20 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

MER $30.01

BUY MER-HH MER AUG $40.00 CALL DEBIT = $0.14
SELL MER-HB MER AUG $37.50 CALL CREDIT= $0.30
NET CREDIT = $0.16

INITIAL "NET- CREDIT TARGET= $0.16 or $16.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.16 = $160.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,340.00
RETURN ON INVESTMENT= 6.84%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $33.00
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

TGT $46.87

BUY TGT-HK TGT AUG $55.00 CALL DEBIT = $0.18
SELL TGT-HX TGT AUG $52.50 CALL CREDIT= $0.42
NET CREDIT = $0.24

INITIAL "NET- CREDIT TARGET= $0.24 or $24.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.24 = $240.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,260.00
RETURN ON INVESTMENT= 10.62%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $48.50
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


HON $50.66

BUY HON-HY HON AUG $57.50 CALL DEBIT = $0.20
SELL HON-HK HON AUG $55.00 CALL CREDIT= $0.45
NET CREDIT = $0.25

INITIAL "NET- CREDIT TARGET= $0.25 or $25.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.25 = $250.00
MARGIN REQUIRE. (x 10 CONTRACTS $2,250.00
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: $52.50
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





Orders to purchase or sell securities through your account with optionsXpress, Inc., an independent registered broker-dealer ("optionsXpress"), shall be accepted and executed solely by optionsXpress, subject to the terms and conditions of your individual account agreement with optionsXpress. optionsXpress makes no investment recommendations and does not provide financial, tax or legal advice. All inquiries regarding your optionsXpress account, including any disputes or trading errors, should be directed to optionsXpress. Option Investor, Inc is not a registered broker-dealer and is not in the business of transacting trades. Furthermore, Option Investor, Inc is not a registered investment adviser, does not provide financial, tax or legal advice, and is not recommending that you buy or sell any particular security. optionsXpress has made its services available to you via Option Investor, Inc as a courtesy. optionsXpress and Option Investor, Inc are separate and unrelated entities. optionsXpress is not affiliated with and does not endorse or warrant the products or services of Option Investor, Inc.

Monthly Cash Machine Newsletter Archives