Category: Stock Option Investment Advice

Australia, which managed to avoid a full-blown recession amid the worldwide economic downturn, raised its interest rates from 3% to 3.25% on October 6, 2009. It is the first G20 nation to tighten its monetary policy, as well as the only one to see its economy expand in the first half of 2009. The move was not a complete surprise, although it did come a month or two earlier than most economists expected. The Australian economy saw a slight contraction in the final quarter of 2008, but it recovered quickly and exceeded expectations in the second quarter of this year. Increased commodity prices and Chinese demand for its natural resources helped boost growth.

Ever since the financial crisis of last fall, credit markets have been tightened up. Consumers and small businesses have had limited availability of credit, causing economic growth to come to a standstill. Some financial experts see signs of credit loosening, perhaps even thawing. Here are a few reasons why some are optimistic that the credit market is stabilizing.

Call option volume for Force Protection (FRPT) was significantly up yesterday, and there does not appear to be any related news. Force Protection’s stock price was also up about 5% yesterday. Force Protection manufactures ballistic and blast-protected vehicles for military applications. Having problems with land mines, no problem, Force Protection has just the vehicle for you. Force Protection’s Buffalo MPCV (Mine Protected Clearance Vehicle) is one of the most advanced mine resistance vehicles in the world.

Stock and stock option volume for GFI Group (GFIG) was significantly up last Friday and the stock price was up over 5%. No significant news related to GFI Group was published on Friday either. GFI Group operates as an inter-dealer broker for over-the-counter derivative products. The company provides software related to trading and provides brokerage services for financial related derivatives, credit, bond, foreign exchange, exotic and interest-rate swaps.

Stock and option volume for Silicon Labs (SLAB) and RF Micro Devices (RFMD) spiked yesterday and their stock prices were also down -4% and 14%, respectively. Silicon Labs designs and develops integrated circuits, primarily in the analog and mixed signal space. SLAB has products in RF (Radio Frequency), video, satellite set-top box and modems. Silicon Labs products have a range of applications from radios and video recorders to telephone and networking equipment.

Protectionism sells well in a climate of fear, but it’s hardly a base for economic policy. After US President Barack Obama’s announcement on September 11 of a 35% tariff on Chinese tires, he immediately downplayed the possibility that the measure will spark a trade war with America’s second largest trading partner. In an interview with Bloomberg News, the president argued that existing trade rule must be enforced to build support with lawmakers and the American public. The White House enacted the tariff in reaction to a petition by the United Steelworkers Union against China for flooding the US market with “entry level” tires.

OK, for those of you who can’t pass up the slot machines at Vegas, MercadoLibre (MELI) popped up on the stock and option volume radar yesterday. MercadoLibre is a company focused on the Latin America Internet e-commerce space. Mercado translated to English is “Market” and Libre translated to English is “Free”, so MercadoLibre’s name translated to English is “Free Market”.

The Walt Disney Company (DIS) announced on August 31, 2009 that it would buy Marvel Entertainment Inc. (MVL) in a deal estimated to be worth $4 billion. The cash and stock deal may not immediately help Disney’s bottom line, but if its 2006 acquisition of Pixar Animation Studios (PIXR) is any indication, Disney will weave its marketing magic around Marvel’s huge library of characters to create a bona fide hit.

Can the automobile industry become successful at selling new cars, online on EBay (EBAY), like other successful industries and individuals? The American iconic company General Motors (MTLQQ.PK) is changing its business model to include an online sales venue for new cars. The salespeople or really a web site will be there to help customers, 24/7, but customers won’t be able to kick the tires or take a test drive.

Investors often consider the maximum potential return for an iron condor stock options position to be capped or limited, however, potential returns for iron condors can be increased after initial entry through rolling.