New Trade for the week of Feb 15th

While quickly browsing through my watch list on lazy Saturday afternoon, Chart of Cree Semi caught my eyes. Cree fell hard last month from $69 to $50 due to earnings and consolidation. After a month of staying low it looks like it is on the move and might try to fill the huge gap of almost $7. Cree has a history of falling hard and running up with fire later. So to participate in the move I would be looking at a March 52.5/57.5 Bull Call Spread with a cost of $2.55. Also with all the concerns about market being ready for a 5 - 10% pull back I might think of giving it more time to work in my favor and look at a June Sprea with a cost of 2.70. If things turnout well this trade returns almost 85% in 3 months. Take a look at the chart to see the technicals.

Let us see how this one shapes up!!

2011 Feb Trades

Today I entered long term trades in Alpha Natural resources (ANR) and Las Vegas Sands (LVS). Both ANR & LVS reported earnings last week. Earnings ok but LVS fell on revenue concerns.

As LVS was bouncing I entered a June 44/49 Call Spread for a debit of 2.32. So risk is $232 / Contract and max reward is %268 (> 100%). The reason for enetering a spread was to reduce the capital outlay and get a longer term option. Target for LVS $50

On ANR I entered a straight call of June 52.5 at a debit of $625. yes I know it is a lof of money but planning on converting it to a spread once it moves up a little. I am looking at ANR to hit $58 or $60 soon.

Let us see how the trade develops!!