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CME Bull Put Spreads Strategy – +12.4% in May 07

In article, “CME Buying CBOT”, we analyzed Chicago Mercantile Exchange’s (CME) purchase of CBOT (BOT) with an eye for a bullish strategy for CME. We continued the CME bull put credit spreads saga and for the month of May, the strategy returned a very nice +12.4% return. This strategy has returned over 52% in only six months. The bidding war between CME and ICE for CBOT continues as outlined in the article, “Two Exchanges May Enter Bidding War to Acquire the Chicago Board of Trade”. CME recently upped its bid for CBOT, but its bid is still not higher than ICE’s bid. Even if the CME/CBOT merger does not come to fruition, CME is looking bullish and using PowerOptions powerful stock options tools to search for potential candidates returned the following bull-put credit spreads stock options position:

Stock Option Trading News

Rail Sector and Franchises Deliver Profits of 2.6% to 5.9% in May Covered Calls

The PowerOptions WeBlog accurately predicted the following trades in the articles “Entrepreneur Magazine Announces Top Franchises for 2007” and “Berkshire Hathaway Buys up Rail Stocks – A look at Covered Calls in the Railroad Sector”: Audio Podcast: An audio podcast of this article is available at:

Stock Option Trading News

Banking Industry Investments – Covered Calls

Another industry we’ll consider which has a tendency to hold up well during an economic malady is the banking industry. The idea of banks performing well during tough economic times seems counterintuitive, but the reason banks are non-cyclical is due to lower interest rates. Generally, the Federal Reserve lowers interest rates during periods of economic slowness in order to stimulate activity and help prop up the economy. And banks generally do very well in an environment of low interest rates, as their costs for borrowing money are significantly less.