The Options Trader
105 W. Monument Street
Baltimore, MD 21201
Thursday, May 27, 2004
Email – #172
** Lock in 200% Profits on Yellow
Yellow Freight (Nasdaq: YELL) has moved up phenomenally since our recommendation. Now, the shares are a little ahead of themselves in light of two factors. First, if the price of oil continues to rise, it will have some impact on the company’s profits. Second, interest rate increases in the months ahead may also cool down the economy enough to soften demand in the transport sector.
Regardless of what happens, the price of Yellow has made strong headway with more than 25% gains in the share price since we bought our LEAPS. As you know, we bought our LEAPS and then sold another LEAPS option against our position to reduce our cost and boost our profit potential if the shares continued to climb. They have done exactly that, and we are sitting on profits of more than 200%.
Here is what you need to do: Buy back your Yellow January 2006 $40 call option (YBQ-AH) and sell your January 2006 $35 call option (YBQ-AG). Your net proceeds will be about $1.50. Our adjusted cost was $0.50, leaving us with a gain of 200% on this play in less than three months!
Regards,
Karim Rahemtulla
For those of you who are looking for answers about OIL, CURRENCIES and PRECIOUS METALS, I invite you to join me at a conference I am hosting in July in San Diego. We will have some to the best minds in the business, with proven track records, in attendance as speakers. Click on the link below for more information http://www.agora-inc.com/reports/300sconf/F300E703/. Alternatively, you can call Event Manager Jayla Watje at 1-888-799-0463 or 410-454-0413.
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Current Portfolio:
Company / Symbol: Lucent (NYSE: LU)
Option / Symbol: Jan 06 $5 call (YXL-AA)
Date Purchased: 5/25/04
Current Price: $0.65
Comment: Buy. Do not pay more than $0.55
Company / Symbol: Dynegy (NYSE: DYN)
Option / Symbol: Jan 06 $5 call (YNY-AA)
Date Purchased: 5/25/04
Current Price: $1.15
Comment: Buy. Do not pay more than $1.10
Company / Symbol: Motorola (NYSE: MOT)
Option / Symbol: Jan 06 $20 call (WMA-AD)
Date Purchased: 5/5/04
Current Price: $3.70
Comment: Hold. TS is $1.85.
Company / Symbol: Lockheed Martin (NYSE: LMT)
Option / Symbol: Jan 06 $55 call (WLA-AK)
Date Purchased: 4/7/04
Current Price: $3.60
Comment: Hold. Sold call against Jan 06 $50 position.
Company / Symbol: Lockheed Martin (NYSE: LMT)
Option / Symbol: Jan 06 $50 calls (WLA-AJ)
Date Purchased: 3/15/04
Current Price: $5.20
Comment: Hold. No trailing stop.
Company / Symbol: Yellow Freight (Nasdaq: YELL)
Option / Symbol: Jan 06 $40 calls (YBQ-AH)
Date Purchased: 4/7/04
Current Price: $3.45
Comment: Buy back this option.
Company / Symbol: Yellow Freight (Nasdaq: YELL)
Option / Symbol: Jan 06 $35 calls (YBQ-AG)
Date Purchased: 3/10/04
Current Price: $5.60
Comment: Sell this option after buying back the Jan 06 $40 call.
Company / Symbol: Placer Dome (NYSE: PDG)
Option / Symbol: Sell Jan 06 $25 call (YDI-AE)
Date Purchased: 4/1/04
Current Price: $1.05
Comment: Hold. Sold call against Jan 06 $20 position.
Company / Symbol: Placer Dome (NYSE: PDG)
Option / Symbol: Jan 06 $20 call (YDI-AD)
Date Purchased: 1/23/04
Current Price: $1.75
Comment: Hold. No TS.
Company / Symbol: Hewlett Packard (NYSE: HPQ)
Option / Symbol: Sell Jan. 06 $30 call (WPW-AF)
Date Purchased: 2/3/04
Current Price: $0.90
Comment: Hold. Sold call against Jan 06 $25 position.
Company / Symbol: Hewlett Packard (NYSE: HPQ)
Option / Symbol: Jan 06 $25 call (WPW-AE)
Date Purchased: 12/10/03
Current Price: $2.00
Comment: Hold. No TS.
Company / Symbol: Nokia (NYSE: NOK)
Option / Symbol: Sell Jan 06 $30 call (WIK-AF)
Date Purchased: 2/9/04
Current Price: $0.20
Comment: Hold. Sold call against Jan 06 $30 position.
Company / Symbol: Nokia (NYSE: NOK)
Option / Symbol: Jan. 06 $22.50 call (WIK-AX)
Date Purchased: 8/29/03
Current Price: $0.50
Comment: Hold. No TS.
Company / Symbol: Chesapeake Energy (NYSE: CHK)
Option / Symbol: Sold Jan 06 $15 call (WZY-AC)
Date Purchased: 11/6/03
Current Price: $2.10
Comment: Hold. Sold call against Jan 06 $12.50 position.
Company / Symbol: Chesapeake Energy (NYSE: CHK)
Option / Symbol: Jan 06 $12.50 call (WZY-AV)
Date Purchased: 7/28/03
Current Price: $3.10
Comment: Hold. No TS
Company / Symbol: S&P 500 MITT (AMEX: MCP)
Date Purchased: 7/18/03
Current Price: $10.24
Comment: Buy under $10. No TS
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