The LEAPS Option Trader
105 W. Monument Street
Baltimore, MD 21201
Thursday, January 12, 2006
#298
** Close Out Your LEXAR Spread For Double-Digit Profits
Close out your Lexar Media (Nasdaq: LEXR) spread. We are up significantly on this play, and it is time to get out after a strong rally. I would have liked to have extended this pick further by buying the 2008 LEAPS, but the new higher strikes are still not out, and it would be better to own the shares at this point on a price-versus-price basis.
To close out this spread, BUY back the Lexar January 2007 $12.50 calls (VRF AV), currently trading for $1.25 on the offer, and SELL the January 2007 $7.50 call option (VRF AU), currently $3.10 on the bid, and book the profits – our third this year! Be sure to use limits, or you are just putting money in the market makers’ pockets.
Once Lexar’s higher strike LEAPS for 2008 are listed, we will reconsider the position.
Regards,
Karim Rahemtulla
Bio:
Karim Rahemtulla is the former Investment Director of The Oxford Club. The editor of The Smart Options E-Report, The Income Trader – A Covered Call Strategy and The LEAPS Option Trader, Karim is also a regular contributor to The Oxford Club Communiqué. His highly successful trading systems use covered calls and LEAPS to boost returns on blue chip stocks, and during the bear markets of 2000 and 2001, his picks outperformed the major market averages. Educated in England, Canada and the U.S. and fluent in several languages, Karim travels the world to find the best investment opportunities for our members.
Copyright – 2006 Mt Vernon Options Club. Mt Vernon Options Club does not act as an investment advisor or advocate the purchase or sale of any security or investment. Mt Vernon Options Club expressly forbids its writers from having a financial interest in any security recommended to its readers. All of our employees and agents must wait 24 hours after an Internet publication prior to following an initial recommendation. And for hard-copy-only publications, 72 hours after the publication is mailed. Investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Mt Vernon Options Club provides its members with unique opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department and editors who contribute to recommendations are proud of the reputation Mt Vernon Options Club has built since its inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommendations and analysis presented to members is for the exclusive use of members. Copying or disseminating any information published by Mt Vernon Options Club, electronic or otherwise is strictly prohibited. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time.
