In the article, ” Bond ETFs – Calendar Calls and the Business Cycle “, we outlined a bond ETF calendar calls stock options strategy. This strategy is mostly geared for a softening economy, but may perform well in an environment of relatively unchanging interest rates as well, as is the case of the current interest rate environment. In the article, “Bond ETFs – Calendar Calls – Knowing When To Fold-Em “, we continued the bond ETF calendar calls stock options strategy. The final results of the position selected ended with a +3.4% return on November 17, 2006 (options expiration day for November).
Month: November 2006
General Motors (GM) Discontinues Saturn Ion
General Motors ( GM ) confirmed on Tuesday the company plans to discontinue manufacturing its beleaguered Saturn Ion. The vehicle is currently being manufactured in its Spring Hill, TN factory. The company stated it would find another vehicle for the plant to manufacture in order to avoid layoffs.
Dril-Quip (DRQ) – Muddy Profits
Dril-Quip has a 25-year history of successfully supplying equipment to the offshore drilling industry. Dril-Quip’s (DRQ) website touts its Mudline Suspension System introduced in 1982 and its Spar Wellhead System introduced in 1990.
Making Money on Credit Returns 3%
In article, “Visa – Plastic Money – IPO“, we analyzed the credit card industry and we used PowerOptions patented SmartSearchXL stock options search tool to find two potential income producing covered calls strategy positions, one for Master Card (MA) and one for American Express (AXP). Both positions returned the maximum potential profit with an average return of 3%, and best of all; the return was generated in only 38 days.
No Stopping GamesStop (GME)
Year to date US video game sales are up 11% from a year ago and analysts are expecting a record-breaking fourth quarter for the industry. Investors were concerned earlier in the year when the video game industry experienced a slight downturn. A subsequent strong sales period and the release of two new hardware platforms are breathing new life into the game industry. The top storefront video game retailer, and the company of focus in this article, is GamesStop Corp. ( GME ).
Abercrombie & Fitch (ANF) – Big 3Q Profits
Wednesday, Abercrombie & Fitch Co. (ANF) announced its third-quarter profit earnings were up 43%. A chief source of growth was its teen chain, Hollister Co., jumping 8% in same-store sales. For the year, Abercrombie expects its EPS to be around $6.60 – up from $3.88 last year.
DJIA – Price Resistance – Nice +8.1% for Nov. 06
In article, “DJIA – Stock Price Resistance“, we outlined a bearish strategy for the Dow Jones Industrial Average when the index is close to its historic high using bear call spreads options. In article, “DJIA – Price Resistance – Revisited“, we analyzed the results of the selections in “DJIA – Stock Price Resistance” denoting a -3.2% loss and we also selected positions again for this strategy for stock options expiring in November of 2006. The selection for stock options expiring in November of 2006 was fully profitable returning a very nice +8.1% return.
Labor Ready (LRW) – Handy Profit Potential
Labor Ready’s ( LRW ) stock price was up 8.25% on Wednesday and appears like it may go even higher. Labor Ready supplies manual labor workers for construction, manufacturing, and skilled trades. The company’s customers are primarily small to midsize businesses that use the company for resource leveling. It is extremely helpful for short-term projects where it would be difficult to hire new permanent employees. Some analysts are suggesting as American companies lean down, they will alternatively turn more and more to services like Labor Ready’s rather than hiring permanent hands.
Home Depot (HD) & Lowes (LOW) – US Housing Market
Housing starts are down nearly 18% from a year ago and there has been a negative trend in housing starts in the months leading up to September 2006. ( realtor.org ) Both the long and short-term housing start trends are forecasted to decrease. Analysts predict this is good news for landlords and bad news for homeowners and renters.
Time Warner (TWX) – News Corp (NWS) – Black Market DVD
Will the Chinese turn from their black market wares and embrace the legal offerings of American companies? News Corp (20th Century Fox) (NWS) is betting on it and is planning to sell inexpensive DVDs to Chinese consumers. A similar concept turned many US consumers from free file sharing websites to legitimate download sites such as iTunes.