We are recommending the following credit spread to the February expiration cycle.
We are recommending credit spread for our Portfolio #2 in
the following issues.
ROST - Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and ddÂ’s DISCOUNTS brand names in the United States. Its Ross Dress for Less brand stores sell brand and designer apparel, accessories, footwear, and home fashions for the entire family at everyday savings of 20 to 60 percent off department and specialty store regular prices; and ddÂ’s DISCOUNTS brand stores sell apparel, accessories, footwear, and home fashions for the entire family at everyday savings of 20 to 70 percent off moderate department and discount store regular prices. As of January 28, 2012, the company operated 1,125 stores, of which 1,037 were Ross Dress for Less brand stores in 29 states, the District of Columbia, and Guam; and 88 were ddÂ’s DISCOUNTS brand stores in 7 states. Its Ross Dress for Less brand stores primarily target middle income households and ddÂ’s DISCOUNTS brand stores target moderate income households. Ross Stores, Inc. was founded in 1957 and is headquartered in Pleasanton, California.
We are recommending the following specific credit spread.
Put credit spreads = bullish put spreads.
We are also recommending closing out the BIDU Feb 97.5/95 put spread for around $0.38 before the close on Monday.
The BID/ASK is $0.34 - $0.42.
As usual try and split the bid/ask on Monday to get the spread close filled.
However, no matter what happens on Monday, we are closing the BIDU put spread before the end of the day on Monday and ahead of Monday's after-hours earnings announcement.
I thought there would be more shrinkage in the premiums by now and it looks
like with Feb 4th earnings announcement on the horizon an only 2 weeks
left to expiration,but that did not happen.
I don't want to take any chances of BIDU missing the analyst numbers and having the stock pull back on such news.
Under normal circumstances this would not even be an issue, we would have remained in the stock, especially when it is over 10 points out of the money, but it is not normal as earning will be announced and this stock has some volatility that we don't nee earnings report to fuel.
BIDU when it has missed numbers, has pulled back as much as 9.8% on occasion.
REMINDER: MCM March 2013 recommendations begin next weekend.