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Saturday, July 11, 2009

One Week to go....


The stock is 3 cents over the call price so anything is possible. There was some positive news on one of the company's products. But it didn't move the stock at all. There is supposed to be some big news regarding another product of the company July 20th. There was not any action analyst wise. Technically, the stock postitioned itself to be a nail biter for all option holders/sellers. The price of the call has 10 - 15 cents of time value left which is still fairly high for one week left before expiration.

The expectation is that the time value will disappear by Tuesday. The call price will track the stock price if the stock is above the call strike price.

As of right now, if the stock stays above the strike price, the shares will be assigned and the profit on the trade will be 15%. If the stock falls below the strike price, I will plan to hold onto the stock and sell the August call, which are trading at 75 - 90 cents.

The experience this trade has given will help find the next trade. There will be a much larger blog after the trade is finished next week.

Talk to you next week!

-As always, I do not fully divulge information on open trades. When the trade ends, I will give out the rest of the details (stock name, price purchased, call purchased, news on company/ETF, chart info) that sort of thing. Please feel free to ask questions and I will answer them the best I can without endangering the trade.

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