Option Investor
New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None SHLD None

Play Editor's Note: Aggressive traders might want to check out JOYG and FCX. Both look very bearish. It wouldn't surprise me to see JOYG drop to the $36.00-35.00 zone. Unfortunately, the stock is so volatile that stop loss placement is a big challenge. FCX could drop to the $47.50 level. I would also keep an eye on the fertilizer stocks. They don't look very healthy. MON might be a bearish candidate if shares slip under $95.00 or its recent low of $92.67 again. I came very close to adding FSLR as a put candidate tonight. The oversold bounce struggled near the $200 level. However, what stopped me was news that the Senate's bailout plan had provisions to extend the tax incentives for the solar industry. We'll have to wait and see if that remains in the final rescue legislation.

New Calls

None today.

New Puts

Sears Holding - SHLD - cls: 89.04 chg: -4.46 stop: 95.15

Company Description:
Sears Holdings Corporation, the publicly traded parent of Kmart and Sears, Roebuck and Co., is the nation's fourth largest broadline retailer with over $50 billion in annual revenues and approximately 3,800 full-line and specialty retail stores in the United States and Canada. (source: company press release or website)

Why We Like It:
I've recently highlighted SHLD in my play editor's notes as a potential bearish candidate. The stock peaked in mid September and investors have been selling the rallies since. The stock just broke down under significant support near $90.00 and its 200-dma and 50-dma. The Point & Figure chart is bearish with a $77 target. The fourth quarter is shaping up to be a very bad quarter especially as consumer spending begins to slow. We're suggesting put positions now but don't be surprised to see a bounce from the $85.00 level. We have two targets. Our first target is $81.00. Our second target is $76.00.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 90.00 KTQ-WR open interest= 291 current ask $12.70
BUY PUT NOV 85.00 KTQ-WQ open interest= 266 current ask $ 9.60
BUY PUT NOV 80.00 KTQ-WP open interest= 136 current ask $ 7.20

Picked on October 01 at $ 89.04
Change since picked: + 0.00
Earnings Date 11/28/08 (unconfirmed)
Average Daily Volume = 3.1 million


WYNN Resorts - WYNN - close: 80.19 chg: -1.45 stop: 82.65

Company Description:
Wynn Resorts, Limited is traded on the Nasdaq Global Select Market under the ticker symbol WYNN and is part of the NASDAQ-100 Index. Wynn Resorts owns and operates Wynn Las Vegas (http://www.wynnlasvegas.com) and Wynn Macau (http://www.wynnmacau.com). (source: company press release or website)

Why We Like It:
Even if congress approves the bailout plan it won't change the fact that the domestic and global economies are slowing. It's possible that WYNN could see a short-term bump on the approval of the plan and thus more conservative traders will want to wait until after we see the market's reaction to the news, which could happen this Friday. The trend in WYNN is bearish and I'm suggesting readers buy puts on WYNN at $77.49, which would be a new relative low. The Point & Figure chart is bearish with a $63 target. If we are triggered our target is $70.50. More aggressive traders may want to aim lower.

Suggested Options:
Our suggested entry point is $77.49. We're suggesting the November puts.

BUY PUT NOV 80.00 UWY-WP open interest= 23 current ask $10.80
BUY PUT NOV 75.00 UWY-WO open interest= 20 current ask $ 8.30
BUY PUT NOV 70.00 UWY-WN open interest= 95 current ask $ 6.40

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 2.0 million

New Strangles

None today.

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