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Call Options Plays
Put Options Plays
Strangle Options Plays
SINA BEAS BWA
    MNST
    MSFT

New Calls

Sina Corp. - SINA - cls: 53.40 change: +2.28 stop: 49.99

Company Description:
SINA Corporation is a leading online media company and value-added information service provider for China and for global Chinese communities. (source: company press release or website)

Why We Like It:
The Chinese Internet stocks have not slowed down. Last week when the U.S. market was selling off the Chinese Internet stocks were still maintaining their gains. It wasn't until Friday's big drop that this group felt any profit taking. Traders are stepping in to buy the dip. Shares of SINA are bouncing from a test of support near $50.00. Our target is the $59.50-60.00 range. SINA is due to report earnings somewhere in the October 29th-November 8th range. Hopefully the closer we get to the end of October we'll find a confirmed date since we do not want to hold over SINA's earnings report. Speaking of earnings Baidu's (BIDU) earnings report is due out this week on October 25th. Reaction to BIDU's earnings could strongly influence shares of SINA.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 50.00 NOQ-KJ open interest= 987 current ask $5.40
BUY CALL NOV 55.00 NOQ-KK open interest=2009 current ask $2.75
BUY CALL NOV 60.00 NOQ-KL open interest= 962 current ask $1.30

Picked on October 23 at $ 53.40
Change since picked: + 0.00
Earnings Date 11/08/07 (unconfirmed)
Average Daily Volume = 1.0 million
 

New Puts

BEA Systems - BEAS - cls: 17.87 change: -0.72 stop: 19.01

Company Description:
BEA Systems, Inc. is a world leader in enterprise infrastructure software. (source: company press release or website)

Why We Like It:
The recent gains in shares of BEAS may be in serious jeopardy. The stock shot higher on October 12th after Oracle (ORCL) made a $6.7 billion ($17 a share) bid for the company. Many believed that other suitors would make a bid for BEAS, which is why shares traded above the $17 level. BEAS felt the offer from ORCL was too low and rejected it. Today, Tuesday, October 23, 2007, produced some big news in this M&A deal. ORCL announced it would give investors until 5:00 p.m. this Sunday to accept the $17 bid or they would cancel it. Shares of BEAS lost 3.8% and traded almost five times the average volume on this news. We suspect that the deal will not happen at this time and shares of BEAS could come crashing down. We're suggesting puts now. Our target is the $15.25-14.75 range. We're suggesting a stop loss at $19.01 but readers could try and play with a stop above yesterday's high ($18.67).

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 20.00 BUC-WD open interest= 1927 current ask $2.25
BUY PUT NOV 17.50 BUC-WW open interest= 8575 current ask $0.50
BUY PUT NOV 15.00 BUC-WC open interest=16009 current ask $0.10

Picked on October 23 at $ 17.87
Change since picked: + 0.00
Earnings Date 10/27/07 (unconfirmed)
Average Daily Volume = 19.6 million
 

New Strangles

Borg Warner - BWA - cls: 95.67 change: +2.03 stop: n/a

Company Description:
Auburn Hills, Michigan-based BorgWarner Inc. is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. (source: company press release or website)

Why We Like It:
Shares of BWA have essentially traded sideways for the last month. The company's earnings report is coming up on October 25th and we would expect some big moves on the results. BWA announces on Thursday morning so tomorrow is our only day to open positions. We would suggest opening strangle positions in the $96.50-93.50 range. The closer to $95.00 the better.

Suggested Options:
A strangle involves buying both an out-of-the-money call and an out-of-the-money put. We're suggesting the November strikes below. Our estimated cost is $4.50. We want to sell if either option hits $7.25 or more.

BUY CALL NOV 100.0 BWA-KT open interest=191 current ask $2.25
-and-
BUY PUT NOV 90.00 BWA-WR open interest=198 current ask $2.25

Picked on October 23 at $ 95.67
Change since picked: + 0.00
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 392 thousand

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Monster Worldwide - MNST - cls: 37.22 chg: +0.76 stop: n/a

Company Description:
Monster Worldwide, Inc., parent company of Monster, the premier global online employment solution for more than a decade, strives to bring people together to advance their lives. (source: company press release or website)

Why We Like It:
Rival Manpower (MAN) saw a pretty big move when it announced earnings a few days ago. We suspect that MNST could also see some post-earnings volatility. The company reports earnings tomorrow after the closing bell. Thus we have one day to open a strangle position. We would suggest positions in the $38.00-37.00 range. The closer to $37.50 the better.

Suggested Options:
A strangle involves buying both an out-of-the-money call and an out-of-the-money put. We're suggesting the November strikes below. Our estimated cost is $1.75. We want to sell if either option hits $2.95 or higher.

BUY CALL NOV 40.00 BSQ-KH open interest=8058 current ask $0.85
-and-
BUY PUT NOV 35.00 BSQ-WG open interest=2329 current ask $0.90

Picked on October 23 at $ 37.22
Change since picked: + 0.00
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 2.0 million

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Microsoft - MSFT - cls: 30.90 change: +0.39 stop: n/a

Company Description:
Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential. (source: company press release or website)

Why We Like It:
MSFT's earnings report is coming up and the stock has rallied back to significant resistance near $31.00. The company's earnings report could be the catalyst that launches MSFT to new multi-year highs or it could push shares below its bullish trend of higher lows. We would suggest positions in the $30.50-31.50 zone. We have two days to open positions since MSFT doesn't report until Thursday night.

Suggested Options:
A strangle involves buying both an out-of-the-money call and an out-of-the-money put. We're suggesting the November strikes below. Our estimated cost is $1.07. We want to sell if either option hits $1.85 or higher.

BUY CALL NOV 32.50 MSQ-KZ open interest=65955 current ask $0.44
-and-
BUY PUT NOV 30.00 MSQ-WK open interest=33327 current ask $0.63

Picked on October 23 at $ 30.90
Change since picked: + 0.00
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 53.0 million
 

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