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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
CHK CMG None
  UBB  

New Calls

Chesapeake Energy - CHK - cls: 46.92 chg: +2.00 stop: 44.65

Company Description:
Chesapeake Energy Corporation is the largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. (source: company press release or website)

Why We Like It:
It looks like some of the natural gas stocks are finding a bottom. One of the biggest companies in that industry is CHK. We are very tempted to buy CHK right here but the stock has resistance directly overhead near the 200-dma and the $48.00 level. We're suggesting two different entry points. If CHK breaks out higher then we want to buy calls at $48.05. If CHK pulls back then we want to buy calls in the $45.50-45.00 zone. We're going to use a stop loss at $44.65 for either entry point. We have two targets. Our first target is $52.00. Our second target is $54.85. FYI: A move over $48.00 would produce a new Point & Figure chart buy signal.

Suggested Options:
We are suggesting the September calls. We have two potential entry points, see above.

BUY CALL SEP 45.00 CHK-II open interest=7099 current ask $3.80
BUY CALL SEP 47.50 CHK-IS open interest=5269 current ask $2.50
BUY CALL SEP 50.00 CHK-IJ open interest=15437 current ask $1.50
BUY CALL SEP 52.50 CHK-IX open interest= 8069 current ask $0.90

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million
 

New Puts

Chipotle Mex.Grill - CMG - cls: 72.02 chg: -1.94 stop: see below

Company Description:
Chipotle Mexican Grill offers a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere. (source: company press release or website)

Why We Like It:
I love CMG's product but their stock looks like it's in serious trouble. Rising food costs are impacting CMG and the stock is in a long-term bearish trend. We want to hop on the band wagon but this is not the spot to do it. We want to see a failed rally under $77.50 or a new breakdown under $70.00. Thus we're listing two potential entry points. If CMG bounces back up into the $76.50-77.50 zone we're suggesting readers buy puts with a stop loss at $78.05. If CMG trades at $69.90 we're suggesting readers buy puts with a stop loss at $73.05. We have two targets. Our first target is $65.50. Our second target is $61.00.

Suggested Options:
We are suggesting the September or October puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY PUT SEP 75.00 CMG-UO open interest= 673 current ask $6.10
BUY PUT SEP 70.00 CMG-UN open interest=2522 current ask $3.50
BUY PUT SEP 65.00 CMG-UM open interest=1968 current ask $1.75

BUY PUT OCT 70.00 CMG-VN open interest= 36 current ask $5.40
BUY PUT OCT 65.00 CMG-VM open interest= 21 current ask $3.50

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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Uniao de Bancos Brasil - UBB - cls: 116.84 chg: -0.62 stop: 117.75

Company Description:
Unibanco is one of the largest Brazilian privately owned banks, with more than 80 years of history and activity in the market. The Bank is present in every segment of the financial market, offering a broad and complete range of services to a diversified customer base. (source: company press release or website)

Why We Like It:
Today marked UBB's fifth test of support near $113 in the last eight months. If UBB were to break down through this support it could see a huge sell-off. Weakness in the U.S. financials has been influencing banks around the globe so if U.S. banks keep falling then UBB might follow. We're suggesting readers buy puts at $112.50. If triggered our target is the $102.50-100.00 zone.

Suggested Options:
We are suggesting the September or October puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY PUT SEP 115.00 UBB-UC open interest= 192 current ask $5.50
BUY PUT SEP 110.00 UBB-UB open interest= 75 current ask $3.60
BUY PUT SEP 105.00 UBB-UA open interest= 24 current ask $2.30

BUY PUT OCT 110.00 UBB-VB open interest= 404 current ask $6.20
BUY PUT OCT 105.00 UBB-VA open interest= 144 current ask $4.40

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 1.5 million
 

New Strangles

None today.
 

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