Today on the PowerOptions blog, we’re going to take a quick look at the stocks Mad Money’s Jim Cramer finds most appealing. Then, we will cover how the average investor, using tools available from PowerOptions, can find the most lucrative and attractive options trade on these stocks. (Note: Jim Cramer does not endorse any of the option strategies based on his stock selections illustrated in this article or on blog.poweropt.com)
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_06_14_Cramer.mp3
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Five Cramer Picks From Wednesday June 13:
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AMZN:
Amazon.com is a company Cramer included in his “New Four Horseman of Technology” segment. Amazon is a bit of a dark horseman when compared to the other three companies mentioned; Apple (AAPL), Research-in-Motion (RIMM), and Google (GOOG). Especially since Cramer had been, up until recently, going on about the overvaluation of Amazon.
HAL:
Halliburton Co. came up during Jim Cramer’s lightning round yesterday when asked about Allis-Chalmers Energy (ALY). Cramer called ALY “good but not great” and considered Halliburton a much better value in the sector. Jim Cramer owns Haliburton in his Action Alerts Plus charitable trust.
CHL:
On China Mobile Limited, Cramer had this to say, “CHL has 68% of all the mobile subscriptions in China. Although there are rumors that the wireless industry in China could be restructured, it could take years for CHL to lose its market leading position.”
RS:
Reliance Steel and Aluminum Company was mentioned among three steel companies Cramer is bullish on. The other two he mentioned were Allegheny Technologies (ATI) and Gerdau American Steel (GNA). He summed up he feelings best by perfunctorily intoning “I like steel… I like steel” during the Mad Money lightning round.
JBX:
Jack in the Box was also revealed as one of Cramer’s favorite picks during the lightning round. In a statement indicative of his love for hyperbole and showmanship Cramer stated, “You hold it because Jack in the Box is one of the best chains on earth.” His enthusiasm leads one to think Jim has enjoyed a Bruschetta Chicken Ciabatta Sandwich or two on the way home from the studio.
Additional Information:
As a note, PowerOptions has trading experts available to help investors more fully understand the option trading process. They can be reached, toll free, at 877-992-7971. There are additional resources on the PowerOptions website for investors to learn more about the fun and exciting world of option investing. The following links, Help with Options, How to Write Covered Calls and Investing in Options are all great resource articles to help you get the hang of options trading.
Potential Trades:
All of the following option trades have 38 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
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| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
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| AMZN | $70.89 | ZQNGN | 07 JUL $70.00 | $3.90 | 5.50% | 4.50% | 4.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HAL | $35.50 | HALGG | 07 JUL $35.00 | $1.55 | 4.40% | 3.10% | 3.10% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CHL | $47.95 | CHLGJ | 07 JUL $50.00 | $0.80 | 1.70% | 1.70% | 6.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RS | $56.97 | RSGK | 07 JUL $55.00 | $4.00 | 7.00% | 3.80% | 3.80% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| JBX | $74.20 | JBXGO | 07 JUL $75.00 | $2.00 | 2.70% | 2.80% | 3.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMZN:
The Amazon trade involves the July $70 call option and offers 5.5% downside protection and 4.5% potential profit if the stock is above the $70 strike price at the end of the option period.
Competitors for AMZN include: Barnes & Noble Inc. (BKS), eBay Inc. (EBAY), Columbia House Company (private), Borders Group Inc. (BGP), Gamestop Corp. (GME), GSI Commerce Inc. (GSIC), VA Software Corp. (LNUX), PC Mall Inc. (MALL), Movie Gallery Inc. (MOVI), and Overstock.com Inc. (OSTK).
HAL:
The Halliburton trade involves the July $35 call option and offers 4.4% downside protection and 3.1% potential profit if the stock is above the $35 strike price at the end of the option period.
Competitors for HAL include: Schlumberger Limited (SLB), Technip (TKP), Bechtel Group, Inc. (private), AMCOL International Corp. (ACO), Basic Energy Services Inc. (BAS), Baker Hughes Inc. (BHI), BJ Services Co. (BJS), Core Labs. NV (CLB), Foster Wheeler Ltd. (FWLT), Newpark Resources Inc. (NR), Roper Indus. Inc. (ROP), Smith Intl. Inc. (SII), TETRA Techs. Inc. (TTI), Weatherford Intl. Inc. (WFT), and W-H Energy Srvs. Inc. (WHQ).
CHL:
The China Mobile Limited trade involves the July $50 call option and offers 1.7% downside protection and 6.0% potential profit if the stock is above the $50 strike price at the end of the option period.
Competitors for CHL include: China Unicom Ltd. (CHU), China Telecommunications Corporation (private), China Netcom Group Corp. (Hong Kong) Ltd. (CN), and Hutchison Telecom. Intl. Ltd. (HTX).
RS:
The Reliance Steel and Aluminum Company trade involves the July $55 call option and offers 7.0% downside protection and 3.8% potential profit if the stock is above the $55 strike price at the end of the option period.
Competitors for RS include: Ryerson Inc. (RYI), Worthington Industries, Inc. (WOR), Metals USA Holdings Corp. (private), and Olympic Steel Inc. (ZEUS).
JBX:
The Jack in the Box trade involves the July $75 call option and offers 2.7% downside protection and 3.9% potential profit if the stock is above the $75 strike price at the end of the option period.
Competitors for JBX include: Burger King Corporation (BKC), McDonald’s Corp. (MCD), and Yum! Brands Inc. (YUM).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] Jim Cramer, Cramer, Columbia House Company, Bechtel Group, Inc., China Telecommunications Corporation, Metals USA Holdings Corp., AAPL, Apple Computer Inc., ACO, AMCOL International Corp., ALY, Allis-Chalmers Energy Inc., ATI, Allegheny Techs. Inc., BAS, Basic Energy Services Inc., BGP, Borders Group Inc., BHI, Baker Hughes Inc., BJS, BJ Services Co., BKC, Burger King Holdings Inc., BKS, Barnes & Noble Inc., CHU, China Unicom Ltd., CLB, Core Labs. NV, CN, China Netcom Group Corp. (Hong Kong) Ltd., EBAY, eBay Inc., FWLT, Foster Wheeler Ltd., GME, Gamestop Corp., GNA, Gerdau AmeriSteel Corp., GOOG, Google Inc., GSIC, GSI Commerce Inc., HTX, Hutchison Telecom. Intl. Ltd., LNUX, VA Software Corp., MALL, PC Mall Inc., MCD, McDonalds Corp., MOVI, Movie Gallery Inc., NR, Newpark Resources Inc., OSTK, Overstock.com Inc., RIMM, Research In Motion Ltd., ROP, Roper Indus. Inc., RYI, Ryerson Inc., SII, Smith Intl. Inc., SLB, Schlumberger Ltd., TTI, TETRA Techs. Inc., WFT, Weatherford Intl. Inc., WHQ, W-H Energy Srvs. Inc., WOR, Worthington Ind. Inc., YUM, Yum Brands Inc., ZEUS, Olympic Steel Inc., covered call investment strategy, help with options, how to write covered calls, investing in options, investment strategy, iron condor, option investing, options trading, poweroptions, stock option trading, stock options [/tags]