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Call Options Plays
Put Options Plays
Strangle Options Plays
HES None GLW

New Calls

Hess Corp. - HES - close: 112.98 chg: +3.24 stop: 107.24

Company Description:
Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. (source: company press release or website)

Why We Like It:
The oil sector rebounded higher thanks to a sharp rally in crude oil this afternoon. Shares of HES, which had been testing technical support at its 100-dma, ended the session with a 2.9% gain. We see the bounce as an opportunity to buy calls with a stop loss under today's low. We have two targets. Our first target is $119.75. Our second target, if HES can breakthrough resistance near $120.00, is the $124.50 mark. We do not want to hold over the late July earnings report.

Suggested Options:
We are suggesting the August calls but plan to exit before the July earnings announcement.

BUY CALL AUG 110.00 IGG-HB open interest=2114 current ask $9.70
BUY CALL AUG 115.00 IGG-HC open interest=2326 current ask $7.10
BUY CALL AUG 120.00 IGG-HD open interest=2952 current ask $5.10

Picked on July 10 at $112.98
Change since picked: + 0.00
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 4.3 million
 

New Puts

None
 

New Strangles

Corning Inc. - GLW - close: 20.16 chg: +0.14 stop: n/a

Company Description:
Corning Incorporated is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. (source: company press release or website)

Why We Like It:
There seems to be some disagreement over just how well GLW is doing. Many believe that GLW's LCD screen business is going to double over the next couple of years. Others see the company's inventory levels rising, which is bearish. The stock has gone straight down for almost four weeks in a row, which is VERY unusual. Shares paused at round-number, psychological support and near its January 2008 lows around $20.00 today. Aggressive traders will be tempted to buy calls here with a stop loss under $20.00. Even though GLW is overdue for a big bounce we don't want to bet on it so we're suggesting a strangle. Earnings are late July and we do plan on holding over the report unless the stock hits our target first. Try and open positions as close to $20.00 as possible but we would use the $20.25-19.75 zone.

Suggested Options:
A strangle involves buying both an out of the money call and an out of the money put. We don't care what direction the stock goes as long as it moves one direction. If it moves far enough one side of our trade will rise enough to pay for the entire trade and make a profit.

We are suggesting the August options below. Our estimated cost is $0.75. We want to sell if either option hits $1.50. Try and keep your investment balanced on both sides of the trade. Thus for every two calls you buy, we need three puts (at current prices).

BUY CALL AUG 22.50 GLW-HX open interest=16237 current ask $0.45
-and-
BUY PUT AUG 17.50 GLW-TW open interest= 3498 current ask $0.30

Picked on July 10 at $ 20.16
Change since picked: + 0.00
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million
 

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