Option Investor

Trade Alerts: NLS & TKTX

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U.S. equities rebounded sharply Monday in the wake of some new merger activity and optimism about share valuations after the recent sell-off. The Nautilus Group (NYSE:NLS) also moved higher in conjunction with the broad rally and we have decided to use this opportunity to exit the position ahead of the company's quarterly earnings report. With the stock price near $23, the MAY-$22.50 (put) options are trading at $0.85 x $0.95, so an order to close the (short) position should easily be filled at $0.90 per contract.

We are also recommending that traders exit the profitable position (MAY-$25 put) in Transkaryotic Therapies (NASDAQ:TKTX), which can be closed for pennies ($0.05 per contract) after the stock's recent strong rally. Then we can use the remaining portfolio collateral to enter a new play, such as Archipelago Holdings (PCX:AX).

OW Staff

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