The LEAPS Trader
105 W. Monument Street
Baltimore, MD 21201
Friday, July 12, 2006
Email – #329
** We Got the Bounce
The other day when I recommended the Hilton 2009 $25 put LEAPS (VHL ME), I expected the market to bounce to give us a better entry price. It did bounce, but our entry price did not get much better. Even though Hilton shares moved up 3% on Wednesday, they gave up those gains yesterday. The offer price of the puts is now at $3.20, just as they were earlier this week when I initially made the pick.
In the past couple of days, even more news has emerged about the weakness across nearly all sectors of the economy. Just yesterday, transport stocks sold off en masse on fears of lower growth. That is the key for the Hilton put LEAP. We are not looking for a crash in growth, just slower growth. That will be enough for us to make money from this play.
Raise your limit on the Hilton PUT LEAPS (VHL ME) to $3.30.
Good trading,
Karim
