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New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None BAC None
  LM  

New Calls

None today.
 

New Puts

Bank of Amer. - BAC - cls: 31.52 change: -1.93 stop: 34.15

Company Description:
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. (source: company press release or website) Don't forget that it was BAC that bought troubled mortgage lender Countrywide.

Why We Like It:
The rebound in the financials is seriously struggling and BAC is beginning to fade from its trendline of overhead resistance. This looks like a good spot to consider new put positions as investors turn fearful again in the financial sector. We're suggesting puts now with a stop loss at $34.15. We have two targets. Our first target is $28.00. Our second target is $25.50.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 32.50 BAC-UZ open interest=20846 current ask $3.35
BUY PUT SEP 30.00 BAC-UF open interest=55497 current ask $2.16
BUY PUT SEP 27.50 BAC-UA open interest=45166 current ask $1.36

Picked on August 07 at $ 31.52
Change since picked: + 0.00
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Legg Mason - LM - close: 39.25 chng: -3.08 stop: 43.51

Company Description:
Legg Mason is a global asset management firm, with approximately $950 billion in assets under management as of March 31, 2008. The company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland. (source: company press release or website)

Why We Like It:
The broker-dealers look vulnerable to more selling. We thought about adding Goldman Sachs (GS) as a put play but too many people consider that company "best of breed" and will be quicker to buy the dips in GS. Instead we're suggesting put positions in LM, which just broke down from what appears to be a bear wedge pattern. This should be considered a higher-risk, more aggressive play because the sector and the stock have been so volatile. Due to this volatility we're starting with a wide stop loss. We have two targets. Our first target is $35.75. Our second target is $32.50.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 40.00 LM-UH open interest= 1140 current ask $3.70
BUY PUT SEP 35.00 LM-UG open interest= 1086 current ask $1.70

Picked on August 07 at $ 39.25
Change since picked: + 0.00
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume = 3.7 million
 

New Strangles

None today.
 

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