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New Option Plays

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Call Options Plays
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Strangle Options Plays
BSC None None
LEAP    
OMG    

New Calls

Bear Stearns - BSC - cls: 169.85 chg: +3.35 stop: 164.95

Company Description:
Founded in 1923, The Bear Stearns Companies Inc. is the parent company of Bear, Stearns & Co. Inc., a leading investment banking, securities trading and brokerage firm. With approximately $66.7 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. (source: company press release or website)

Why We Like It:
The broker-dealers are on the run again! The XBD index produced a strong bounce after a two-week consolidation and looks poised to hit new all-time highs. Leading the pack are stocks like GS, BSC, MER, and MS. We like BSC as a bullish candidate to buy calls because shares of BSC are bouncing from its rising trendline of support. We'll put the stop loss under the recent low and aim for the $179-180.00 range. We do not want to hold over the mid March earnings report. FYI: More conservative traders might want to play with a tighter stop loss near $166.50.

Suggested Options:
We are suggesting the March calls. You, the individual trader, should decide which month and strike price best suits your trading style and risk for any suggested play.

BUY CALL MAR 165.00 BSC-CM open interest= 12 current ask $9.50
BUY CALL MAR 170.00 BSC-CN open interest= 32 current ask $6.40
BUY CALL MAR 175.00 BSC-CO open interest=125 current ask $3.90
BUY CALL MAR 180.00 BSC-CP open interest=207 current ask $2.20

Picked on January 24 at $169.85
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Leap Wireless - LEAP - close: 61.09 change: +1.02 stop: 57.95

Company Description:
Leap, headquartered in San Diego, Calif., is a customer-focused company providing innovative mobile wireless services targeted to meet the needs of customers underserved by traditional communications companies. With the value of unlimited wireless services as the foundation of its business, Leap pioneered both the Cricket and Jump MobileTM services. (source: company press release or website)

Why We Like It:
After six weeks of consolidating sideways it looks like LEAP is ready to begin its next leg higher. Technical indicators are turning bullish and today's rally, on strong volume, produced a breakout above the two-week trendline of resistance. LEAP also appears to be rebounding from the bottom edge of a wide, rising channel. We're suggesting call positions now. More conservative traders may want to wait for a new high over $62.35. Our target is the $66.00-67.50 range. We do not want to hold over the mid March earnings report.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 60.00 UAO-CL open interest=1415 current ask $3.50
BUY CALL MAR 65.00 UAO-CM open interest= 0 current ask $1.30

Picked on January 24 at $ 61.09
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 437 thousand

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OM Group - OMG - close: 47.36 change: +1.17 stop: 43.89

Company Description:
OM Group is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia, Africa and Australia. (source: company press release or website)

Why We Like It:
It looks like the consolidation in OMG is almost over. Some of the daily and weekly technical indicators are turning bullish. The stock rallied 2.5% today and broke out above technical resistance at the 50-dma. More aggressive traders might want to consider call positions here. We see additional resistance near its 100-dma (around 47.50) and the $48.00 level looks like it could be trouble. Therefore we're suggesting a trigger to buy calls on OMG at $48.05. If triggered our target is the $54.00-55.00 range. We do not want to hold over the early March earnings.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 45.00 OMG-CI open interest= 2569 current ask $4.80
BUY CALL MAR 50.00 OMG-CJ open interest= 652 current ask $2.25

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/02/07 (unconfirmed)
Average Daily Volume = 770 thousand
 

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New Strangles

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