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Strategies & Market Trends : Gersh's Option trades -- Ignore unavailable to you. Want to Upgrade?

To: Mark Johnson who wrote (621)	10/20/2007 2:11:01 PM
From: Mark Johnson	Read Replies (1) \| Respond to of 652

CAT just lowered it's guidance on earnings. Given the possibility the economy is slowing down and the construction industry will demand less construction goods, I really like the idea of shorting the CAT November calls. Right now I really like shorting the November 85 calls between 25 cents and 30 cents. Given the idea you short at 30 cents, yes high end expectation, you would make about 4% on the trade given you have to front about $7,400 to short the option. Aggressive shorts can short the Nov 80 calls at around 75 cents. Remember, if the options double in price, cover your short. Right now I prefer the Nov 85 calls and would stick with those. Good luck option shorter!!!!