FYI: The MOTOROLA "PLAY":
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A 'cheap shot' on Motorola
Options are typically used for either hedging or speculating. If you belong to the group of speculators -- or you have some spare change you were planning on taking to the roulette table in Vegas -- Alan MacKenzie has play for you:
July 50 puts on Motorola (MOT=SJ). The technology giant (MOT),
sheduled to report earnings after the market closed, said early last month it will fall far short of analysts' expectations.
"Motorola has consistently disappointed over the past few quarters, so if you're going to take a cheap shot at Motorola, this is the one," said MacKenzie, managing general partner at Orbit II Partners LP in New York.
The July 50 puts were going for about 3/8 on Tuesday, and Mackenzie has picked up a few contracts for himself. "If you catch this right, the half-dollar option can be worth five dollars," he said.
Another thing to keep in mind: when Motorola warned about earnings, it also said it will detail a broad restructuring plan. If the plan, which is expected to include $1.95 billion in charges, disappoints analysts, shares could get swept down. Motorola stock added value ahead of its earning release. |
