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New Calls

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New Puts

Cbot Holdings - BOT - close: 111.50 chg: -2.50 stop: 113.01

Company Description:
As one of the leading global derivative exchanges, the Chicago Board of Trade provides a diverse mix of financial, equity and commodity futures and options-on-futures products. Building on its 158-year history, the CBOT continues to advance into the future using the strength of deep liquidity, market integrity and member-trader expertise. Using superior trading technology in both electronic and open-auction trading platforms, the CBOT provides premier customer service to risk managers and investors worldwide. (source: company press release or website)

Why We Like It:
We are going to label this an aggressive play. Shares of BOT tend to be somewhat volatile and we need to start with a relatively wide stop loss. BOT's IPO was pretty successful back in October with a massive run up. After a three-month consolidation the stock produced another strong run up but the rally stalled at the October highs. Now the shares have produced what looks like a bearish head-and-shoulders pattern. Currently BOT is flirting with a breakdown under the neckline of the H&S pattern around support near $110. The P&F chart, which eliminates some of the noise seen on the daily chart, is bearish with a sell-signal pointing to a $92 target. We are going to suggest a trigger at $108.95, which is under Monday's low. If triggered then we'll target a decline into the $101.50-100.00 range. Our time frame is about three to four weeks.

Suggested Options:
We are suggesting the May puts although June puts would certainly work. We suggest double checking these prices, they seem a little high.

BUY PUT MAY 115.00 BOT-QC open interest=126 current ask $8.70
BUY PUT MAY 110.00 BOT-QB open interest= 10 current ask $5.70
BUY PUT MAY 105.00 BOT-QA open interest=110 current ask $3.70

Picked on April 25 at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/19/06 (confirmed)
Average Daily Volume = 322 thousand
 

New Strangles

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