The Options Advantage
105 W. Monument Street
Baltimore, MD 21201
Wednesday, April 07, 2004
Email – #164
** Keep on Truckin’ for 40% Profits Today… and up to 1,600% Profits to Come
Yellow Freight (Nasdaq: YELL) has been an admirable
performer for us from day one. If you recall, the
recommendation to buy the Yellow Freight January 2006 $35
call options (YBQ-AG) came out three hours before the
company announced better earnings for the quarter. As a
result, many readers were filled on the trade and some were
not. It is NEVER my intention to set a limit price that we
CANNOT all be filled at. But, in the case of Yellow, I had
no idea that the company was about to pre-announce good
news. Nevertheless, it has been up, up and away since our
buy at $4.40.
Currently the options are at $6.30 per share, resulting in
a 40%-plus gain in just a few weeks. Sell half of your
position in the YBQ-AG options and pocket the gains. For
the reaming position, sell the January 2006 $40 call
options (YBQ-AH) against your remaining options. This will
take 93% of the money off the table and leave you with a
cost of $0.30 with a $5 upside, or 1,600%. For those of you
who cannot engage in this spread, sell your position
outright and pocket the profits. Also, remove the mental
sell-stop on this position.
We have accumulated quite a few positions in our spread
portfolio. Each one, HPQ, NOK, CHK, YELL and PDG are very
profitable today. Just think how they all might look in the
next few months if we don’t have a meltdown. On top of
this, we have taken SIGNIFICANT dollars off the table while
preserving a ton of upside.
**************************************
Riding the Rocket for 55%-plus Gains in Just Two Weeks –
It’s Time For More
Our Lockheed Martin (NYSE: LMT) calls are up more than 55%
in two weeks. You know what that means. It’s time to sell
to take money off the table and then sell more options
against the original pick to lower our cost to $0.15 with a
$5 profit potential. Here’s what you need to do:
Sell HALF of your current position of the January 2006 $50
calls (WLA-AJ) and pocket the profits. On the remaining
options sell the Lockheed January 2006 $55 call options
(WLA-AK). These are currently going for $3.40, bringing
your cost down to $0.15. The upside is limited to $55, or
$5 above your $50 (WLA-AJ) options.
Not only will we be taking 97% of our money off the table,
pocketing a 55%-plus gain in the process, but we will also
now have a 3,000% upside on our remaining options. For
those of you who cannot sell options against your
positions, please sell your position and pocket the short-
term gains.
Also, remove your mental sell-stop on the position. If you
need a broker who is FULL-SERVICE, yet cheaper than on-line
brokers, and who can execute trades like this one, please
call our Pillar-One recommended broker Greg Long at 800-
329-1984.
Regards,
Karim Rahemtulla
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