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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None None BBOX
    IMDC
    OSK
    PDLI

New Calls

None today.
 

New Puts

None today.
 

New Strangles

Black Box - BBOX - close: 39.40 chg: +0.10 stop: n/a

Company Description:
Black Box is the world's largest technical services company dedicated to designing, building and maintaining today's complicated data and voice infrastructure systems. Black Box services 152,000 clients in 141 countries with 139 offices throughout the world. (source: company press release or website)

Why We Like It:
Earnings season is still in full swing so we're going to try and take advantage of the volatility that can occur as investors react to earnings reports. Our first strangle candidate is BBOX. The stock gapped higher in July after its last earnings report but since then shares have filled the gap. Lately the stock has been consolidating sideways between $38 and $42. The company is due to report earnings on Tuesday, November 1st after the market close. Wall Street is looking for 70-cents a share. We are going to suggest an entry window of $39.25-40.75 to open strangles. The closer to $40.00 the better.

Suggested Options:
We are suggesting December options for this strangle. At current prices this would cost $1.65. Try and keep it under $1.75. We are going to aim for a rise to $2.85.

BUY CALL DEC 45.00 QBX-LI open interest=207 current ask $0.75
-and-
BUY PUT DEC 35.00 QBX-XG open interest=364 current ask $0.90

Picked on October 30 at $ 39.40
Change since picked: + 0.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 124 thousand

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Inamed Corp. - IMDC - close: 70.63 change: +0.73 stop: n/a

Company Description:
INAMED is a global healthcare company with over 25 years of experience developing, manufacturing and marketing innovative, high-quality, science-based products. Current products include breast implants for aesthetic augmentation and for reconstructive surgery; a range of dermal products to treat facial wrinkles; and minimally invasive devices for obesity intervention, including the LAP-BAND System for morbid obesity. (source: company press release or website)

Why We Like It:
IMDC produced some volatility last month after gapping higher on news that the FDA had sent the company an approval letter to reintroduce silicone implants. There were conditions the company would have to agree to and the stock's strength has faded sharply over the last few weeks. Now shares are consolidating sideways near the $70.00 level as investors wait for the company's earnings report. IMDC is expected to report earnings after the closing bell on Tuesday, November 1st. Analysts are looking for profits of 49 cents a share. We would suggest an entry window of $71.00-69.00 but the closer to $70.00 the better.

Suggested Options:
We are suggesting December options for this strangle. At these prices the cost would be $2.80. Try and keep your cost under $3.00. We'll aim for a rise to $5.00 or more.

BUY CALL DEC 75.00 UZI-LO open interest= 11 current ask $1.60
-and-
BUY PUT DEC 65.00 UZI-XM open interest= 64 current ask $1.20

Picked on October 30 at $ 70.63
Change since picked: + 0.00
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 533 thousand

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Oshkosh Truck - OSK - close: 42.82 chg: +0.98 stop: n/a

Company Description:
Oshkosh Truck Corporation is a leading manufacturer of specialty trucks and truck bodies for the defense, fire and emergency, concrete placement and refuse hauling markets. Oshkosh Truck is a Fortune 1000 company with products marketed under the Oshkosh, Pierce, McNeilus, Medtec(TM), Geesink, Norba, Jerr-Dan, BAI, CON-E-CO and London brand names. The company is headquartered in Oshkosh, Wis., and had annual sales of $2.26 billion in fiscal 2004. (source: company press release or website)

Why We Like It:
Shares of OSK have been consolidating sideways for more than a month. We suspect that the earnings report due out on Tuesday, before the market open, could be the catalyst needed to push OSK outside of its trading range. Analysts are expecting the company to turn in earnings of 57 cents a share. We are suggesting an entry window of $42.00-43.00.

Suggested Options:
We are suggesting the December options for this strangle. Currently they have pretty wide spreads. More experienced traders might want to try splitting the spread and hope you get filled. At current prices the cost for this strangle would be 1.75. Try and keep your cost under $1.90. We're going to aim for a quick rise to $3.00 or more.

BUY CALL DEC 45.00 OSK-LI open interest=154 current ask $0.95
-and-
BUY PUT DEC 40.00 OSK-XH open interest= 0 current ask $0.80

Picked on October 30 at $ 42.82
Change since picked: + 0.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 405 million

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Protein Design Labs - PDLI - cls: 27.70 chg: +0.18 stop: n/a

Company Description:
PDL is a biopharmaceutical company focused on the research, development and commercialization of novel therapies for inflammation and autoimmune diseases, acute cardiac conditions and cancer. PDL markets several biopharmaceutical products in the United States through its hospital sales force and wholly-owned subsidiary, ESP Pharma, Inc. As a leader in the development of humanized antibodies, PDL has licensed its patents to numerous pharmaceutical and biotechnology companies, some of which are now paying royalties on net sales of licensed products. (source: company press release or website)

Why We Like It:
Biotech stocks are naturally volatile due to the immense pressure on drug development and approvals. We believe that PDLI can also produce a lot of volatility with its next earnings report. The company is due to report on Tuesday, November 1st after the market close. Wall Street expects PDLI to reports a loss of 4 cents a share. We're going to suggest an entry window of $28.00-27.00.

Suggested Options:
We are suggesting the December options for this strangle. At current prices the cost would be $1.80. Try and keep your cost under $2.00. We'll aim for a rise to $3.25.

BUY CALL DEC 30.00 PQI-LF open interest=565 current ask $1.00
-and-
BUY PUT DEC 25.00 PQI-XE open interest= 37 current ask $0.80

Picked on October 30 at $ 27.70
Change since picked: + 0.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Molson Coors Co - TAP - close: 60.90 chg: -0.00 stop: n/a

Company Description:
Molson Coors Brewing Company is world's fifth-largest global brewer, with pro-forma combined annual volume of 60 million hectoliters and net sales of more than US$6 billion. Molson Coors has a leading market share in Canada and in the U.K., a growth profile in the U.S. and an emerging market opportunity in Brazil. (source: company press release or website)

Why We Like It:
The price action in shares of TAP has narrowed significantly as investors await the company's earnings report. TAP is due to report earnings on Tuesday morning before the market open. Analysts are looking for profits of $1.23 a share. We believe the tight consolidation offers an opportunity to play a strangle here. We would suggest an entry window of $61.00-60.00.

Suggested Options:
We are suggesting the December options. At current prices the cost of the strangle would be $1.25. Try and keep your cost under $1.50. We'll aim for a rise to $2.50 or higher.

BUY CALL DEC 65.00 TAP-LM open interest= 79 current ask $0.75
-and-
BUY PUT DEC 55.00 TAP-XK open interest= 49 current ask $0.50

Picked on October 30 at $ 60.90
Change since picked: + 0.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 553 thousand
 

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