The Volatility Trader
105 W. Monument Street
Baltimore, MD 21201
Monday, May 21, 2007
Email – #268
Volatility Trader Alert
Dear Subscriber,
On Friday, we attempted to buy the Bunge (NYSE: BG) July 2007 $80 calls (BG-GP) at $2.80, or better . However, the stock rallied at the same time as my e-mail was being delivered, and the price I specified was not obtainable. Consequently, the trade will not be marked in the Volatility Trader portfolio.
Should the stock pull back slightly, we may try to purchase the options again. For now though, we will put Bunge on the backburner, as missed money is always better than lost money.
** New Trade **
The overall fundamentals for coal continue to look very promising for the second and third quarters, and I expect the current rally to continue.
And while most stocks within the sector have already started to gain ground, some of the tier-two players are only now commencing their rebound.
With this in mind, we are going to buy the International Coal Group (NYSE: ICO) December 2007 $5.00 calls (ICO-LA) for no more $1.30.
Should the underlying stock begin to fall back into the 200-daily moving average (around $5.25 right now), I will e-mail you with further instructions regarding the position.
Lastly, beyond bullish price pressure within coal markets, there’s significant consolidation beginning to surface within the Appalachia mining companies. And ICO is easily a prime candidate for more aggressive firms. Thus, our trade is supported by underlying fundamentals, and the possibility of a buyout on the horizon.
Exit is everything,
Mark Whistler
Current Portfoli
International Coal Group (NYSE: ICO)
Dec 07 $5.00 calls ICO-LA
Purchased: NEW
Current Price: Buy for $1.30 or better .
Bunge Ltd. (NYSE:BG)
Jul 07 $80 calls BG-GP
Purchased: Cancelled
Current Price: Unable to enter trade.
Diamonds Trust (AMEX: DIA)
Jun 07 $132 puts DAW-RB
Purchased: 5/10/2007
Current Price: $0.50
InterContinental Exchange (NYSE: ICE)
June 07 $100 puts ICE-RT
Purchased: 3/21/2007
Current Price: $0.00
June 07 $155 calls IHH-FK
Purchased: 3/21/2007
Current Price: $2.45
Digital Realty Trust (NYSE:DLR)
July 07 $40 puts DLR-SH
Purchased: 3/14/2007
Current Price: $1.25
