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

To: Mark Johnson who wrote (624)	11/11/2007 11:21:08 PM
From: Mark Johnson	Read Replies (1) \| Respond to of 652

Here is a speculative pick, JASO call options. The thing could pop up, like a person off of a diving board but like the idea of shorting the November 70 calls, bidding around 45 cents. I think it will pop up at some point, either in general or on short covering. Stock was off about 15 points on friday. Stock is trading just under $55 a share. This stock will continue to trade all over the map, since it had such a large sell off on huge volume, I don't see it going back to its old high of $70 a share and that is why I like the idea of shorting the November $70 calls which expire in 5 days or less. One thing working in the shorts favor is that a GS analyst thinks there will be lower margins, which SHOULD keep a cap on the stock, but that does not guarantee there will be no upside. Depending on where you short the options, you would have to front about $5,500 to short 10 Nov 70 calls at 45 cents or about 8% profit before commissions for a weeks work. Cover the short if the stocks hits the 66 to 67 range. On a scale of 10 being the best and 1 being the worst, I give this about a 5 or 6. I prefer to have a confidence level of 8 or higher when shorting call options. When shorting call options, safety is #1. This short is not a safe play but has a lot of speculation. The gutsy call shorts may want to wait until the stock pops up on short covering, then short the heck out of the calls around the $1+ range. Either way, the short is still speculative, so use caution. Good luck