Option Investor
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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None DE None

New Calls

None today.

New Puts

Deere & Co. - DE - close: 79.00 change: -2.66 stop: 82.55

Company Description:
Deere & Company is the world's leading provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment. (source: company press release or website)

Why We Like It:
We are doubling up on the machinery stocks. We already have CAT as a put play. Now we're adding DE. Most traders will want to avoid having too many plays in the same sector. Shares of DE have failed near the top of its recent trading range and the stock is poised to begin a new leg lower after breaking its longer-term trendline of support (see chart). Aggressive traders could jump in now. We want to see a breakdown under the May low. Our trigger to buy puts is at $78.49. If triggered our target is the $70.50 mark.

Suggested Options:
We are suggesting the July puts. Our trigger is at $78.49.

BUY PUT JUL 80.00 DE-SP open interest=1501 current ask $4.30
BUY PUT JUL 75.00 DE-SO open interest=2176 current ask $2.10
BUY PUT JUL 70.00 DE-SN open interest=1304 current ask $0.85

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 08/13/08 (unconfirmed)
Average Daily Volume = 5.4 million


Monsanto - MON - close: 133.40 change: -2.94 stop: 140.55

Company Description:
Monsanto Company is a leading global provider of technology- based solutions and agricultural products that improve farm productivity and food quality. (source: company press release or website)

Why We Like It:
This put play on MON is very speculative. As a matter of fact I'm calling it a lottery ticket play. We're only suggesting out of the money puts. If we're right, they should almost double in value. If we're wrong it could be a 100% loss. I'm actually long-term bullish on the fundamental story for most of the fertilizer-related stocks. However, short-term MON has produced three failed rallies at its trendline of resistance (see chart) and the technical indicators are rolling over. We have a VERY wide stop loss for this play. Our target is the $126.50 mark. We do not want to hold over the June 25th earnings report. Speaking of earnings MON just had its estimates raised and price target upgraded to $154 today.

FYI: The $125.00 level should be short-term support and we might use a bounce there as an entry point for new bullish positions.

Suggested Options:
We're suggesting the June $125 put, which is very risky with less than two weeks left. Or the July $125 put, which is still risky.

BUY PUT JUN 125.00 MFP-RE open interest=7351 current ask $1.30

BUY PUT JUL 125.00 MFP-SE open interest=2963 current ask $5.00

Picked on June 11 at $133.40
Change since picked: 0.00
Earnings Date 06/25/08 (confirmed)
Average Daily Volume = 6.5 million

New Strangles

None today.

New Play Archives