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Additional MCM SEPTEMBER 2008 recommendations 8-24-08

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We are adding the following issues to our SEPTEMBER recommended list.

We are recommending credit spreads in the following issues


DRYS - Dryships Inc., based in Greece, is an owner and operator of drybulk carriers that operate worldwide.

RS - Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the United States. Through a network of metals service centers, the company provides value-added materials management and metals processing services and distributes a full line of metal products, including carbon, alloy, stainless and specialty steel, aluminum, brass and copper products to customers in a broad range of industries. Some of these metals service centers provide processing services for specialty metals only.

EBAY - eBay is one of the world's largest online trading communities. eBay creates a powerful marketplace for the sale of goods and services by a passionate community of individuals and small businesses. eBay enables trade on a local, national and international basis with local sites in numerous markets in the United States and country-specific sites in the United Kingdom, Canada, Germany, Austria, France, Italy, Japan, Korea and Australia

We are recommending the following specific credit spreads


Call credit spreads - (bearish call spreads)

DRYS $71.09

BUY DQR-IR DRYS SEP $90.00 CALL DEBIT = $0.55
SELL DQR-IQ DRYS SEP $85.00 CALL CREDIT= $0.90
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: $76.00
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
DQR-IQ EXIT >> = $3.60 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


RS $57.31

BUY RS-IN RS SEP $70.00 CALL DEBIT = $0.30
SELL RS-IM RS SEP $65.00 CALL CREDIT= $0.70
NET CREDIT = $0.40
 

INITIAL "NET- CREDIT TARGET= $0.40 or $40.00
POTENTIAL PROFIT (x 10 CONTRACTS @ $0.40 = $400.00
MARGIN REQUIRE. (x 10 CONTRACTS $4,600.00
RETURN ON INVESTMENT= 8.70%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $60.00
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
RS-IM EXIT >> = $3.40 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

EBAY $25.03

BUY QXB-IY EBAY SEP $27.50 CALL DEBIT = $0.13
SELL QXB-IZ EBAY SEP $26.00 CALL CREDIT= $0.48
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 $1,150.00
RETURN ON INVESTMENT= 30.43%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE
1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $25.75
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



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