I hope everyone had a chance to buy the Citicorp LEAPS (CitiGroup January 2012 $5 Calls) over the past few weeks. I reiterated the buy on February 22nd when we entered into the China FXI Put. Here’s what I said:

On Citigroup, the 2012 $5 call options remain a buy here and they are cheap still at 45 cents. This is our “black swan” bet on the market. If it moves higher, this option will soar in value.

Those same options are trading at 70 cents today up more than 50% since that day… They have been as high as 80 cents in the past week or so. We will look to enter a bull spread in this position if we crack the 90 cent level. Citi was very positive on its outlook for the coming year, which is great news for us if it pans out. We are holding LEAPs that expire almost TWO years from now, giving us a very strong chance at triple and quadruple digit profits from this play.

Akamai is flying, breaking $30. We have a $15/20 bull spread which is looking very secure right now with the chance of bringing us another quadruple digit win in the coming months.

Our China play is not profitable right now, but we have seen this story many times before. We use LEAPs to reduce our financial risk and to give us time. We have lots of time on this one and the situation in China and in our markets can turn on a dime.

Finally, I want to share an email I received from a member who wrote in about the USAir play. If you recall we just closed it out for a 67% gain and entered a bull spread for those of you who wanted to at zero cost… I know many of you did even better!

“No complaints here on the 400 Report LCC bull spread conversion. I was a day late on acting on the recommendation, which is not a good idea but sometimes works to the good side.

I bought the 7.5 calls for only $1.05 and sold the 10 calls for $1.43. So I’m getting paid $0.38 a share to ride the gravy train express.

Good Job Karim and the team.”

- G.H.  

Karim