Option Investor
Newsletter

MCM INITIAL DECEMBER RECOMMENDATIONS FOR 11-17-08

HAVING TROUBLE PRINTING?
Printer friendly version

Let's begin the last month of 2008, DECEMBER with the following recommendations.

We are recommending credit spreads in the following issues:

TDS - Telephone & Data Systems is a diversified telecommunications corporation. Through its strategic business units, U.S. Cellular and TDS Telecom, TDS operates primarily by providing cellular and local telephone service. TDS builds value for its shareholders by providing excellent communications services in growing, closely related segments of the telecommunications industry.

VZ - Verizon Communications, formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of high-growth communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the world's largest provider of print and on-line directory information

GMCR - Green Mountain Coffee roasts high-quality arabica coffees to produce a variety of coffee which it sells through a coordinated multi-channel distribution network in its wholesale and direct mail operations. This distribution network is designed to maximize brand recognition and product availability. The company is one of the leading specialty coffee companies in its established markets

GVA - Granite Construction, Inc. is a diversified heavy civil contractor and construction materials producer. The Company concentrates on infrastructure projects including roads, bridges, dams, tunnels, canals and rapid transit facilities. The Company also manufactures asphalt, concrete base rock and other construction materials. The Company has offices in Arizona, Nevada, Utah, Texas, Georgia and California.

ALL - Allstate Corporation's business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and their subsidiaries. Allstate is engaged, principally in the United States and Canada, in the personal property and casualty insurance business and the life insurance and savings business. Allstate has four business segments: personal property and casualty; life and savings; discontinued lines and coverages; and corporate and other business.

We are recommending the following specific credit spreads


Call Credit Spreads - Bearish call spreads

OPENING TRANSACTIONS

TDS $30.04
{{{ BUY TDS-LH TDS DEC $40.00 CALL DEBIT = $0.70
SELL TDS-LG TDS DEC $35.00 CALL CREDIT= $1.10
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: $32.50

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: THE POSITION STOP BELOW

TDS-LG EXIT >> = $4.40 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
`

VZ $30.00
{{{ BUY VZ-LH VZ DEC $40.00 CALL DEBIT = $0.08
SELL VZ-LG VZ DEC $35.00 CALL CREDIT= $0.49
NET CREDIT = $0.41 }}}

INITIAL "NET- CREDIT TARGET= $0.41 or $41.00

POTENTIAL PROFIT (x 10 CONTRACTS @ $0.41 = $410.00

MARGIN REQUIRE. (x 10 CONTRACTS $4,590.00

RETURN ON INVESTMENT= 8.93%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE

1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $32.50

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

VZ-LG EXIT >> = $3.00 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
`

GMCR $29.25
{{{ BUY QGM-LH GMCR DEC $40.00 CALL DEBIT = $0.25
SELL QGM-LG GMCR DEC $35.00 CALL CREDIT= $0.65
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: $32.50

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

QGM-LG EXIT >> = $3.25 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
`

GVA $31.65
{{{ BUY GVA-LI GVA DEC $45.00 CALL DEBIT = $0.40
SELL GVA-LH GVA DEC $40.00 CALL CREDIT= $0.70
NET CREDIT = $0.30 }}}

INITIAL "NET- CREDIT TARGET= $0.30 or $30.00

POTENTIAL PROFIT (x 10 CONTRACTS @ $0.30 = $300.00

MARGIN REQUIRE. (x 10 CONTRACTS $4,700.00

RETURN ON INVESTMENT= 6.38%

EXIT STRATEGY = 1. WATCH LIST 2. MAXIMUM LOSS SPREAD PRICE DIFFERENCE

1. STOCK WILL BE PLACED ON WATCH LIST IF STOCK PRICE RISES TO: $35.00

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

GVA-LH EXIT >> = $3.50 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
`

ALL $27.07
{{{ BUY ALL-LU ALL DEC $37.50 CALL DEBIT = $0.20
SELL ALL-LZ ALL DEC $32.50 CALL CREDIT= $0.70
NET CREDIT = $0.50 }}}

INITIAL "NET- CREDIT TARGET= $0.50 or $50.00

POTENTIAL PROFIT (x 10 CONTRACTS @ $0.50 = $500.00

MARGIN REQUIRE. (x 10 CONTRACTS $4,500.00

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: $30.00

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

ALL-LZ EXIT >> = $3.00 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

Monthly Cash Machine Newsletter Archives