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New Plays

New Option Plays

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Call Options Plays
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SPW None None
USO    

New Calls

SPX Corp - SPW - close: 43.44 change: -2.72 stop: 39.95

Why We Like It:
The market looks poised to bounce from its lows today. The NASDAQ and the Russell 2000 index both tested their lows and rebounded. Shares of SPW have also tested its October lows and bounced. This would be a bullish double-bottom pattern if SPW rallied from here. This also provides a relatively lower-risk entry point since we can easily place our stop loss under today's low. We're suggesting calls right here. Our first target is $49.75. Our secondary target is $54.50. We do not want to hold over the late October earnings report coming up.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 50.00 SPW-KK open interest=493 current ask $3.50

Picked on October 23 at $ 43.44
Change since picked: + 0.00
Earnings Date 10/29/08 (unconfirmed)
Average Daily Volume = 1.2 million

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U.S. Oil Fund - USO - close: 56.60 chg: +1.67 stop: 54.45

Why We Like It:
The USO is the oil ETF based off the spot price of West Texas light, sweet crude oil. Oil and the USO have been in a non-stop free fall for the last six weeks. The recent lows mark a $35 move, which corresponds to the first $35 drop that began in July. The $55.00 level was previous resistance many months ago so it should now act as support. If there was ever a place to try and call a bottom on the USO this is a decent spot. There should be no doubt that this is a very speculative play (a.k.a. high risk) but we'll try to limit that risk with a stop loss under today's low. Our first target is $62.50. Our secondary target is $67.50.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 60.00 USO-KL open interest=2960 current ask $3.70
BUY CALL NOV 65.00 USO-KM open interest=1680 current ask $2.15

Picked on October 23 at $ 56.60
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 13.1 million
 

New Puts

None today.
 

New Strangles

None today.
 

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