The FRK $46.63 call is up to $6, almost a double…
I would strongly suggest a .50 trailing stop here to preserve a $2.20 gain. No sense being greedy, if it pulls back we just wait and reenter when it’s safe.
Update on the Google Spread
Last Friday we were here:
Buy the March ’06 $450 call for $17 // Now at $19.20
Sell the January ’06 $470 for $5 // Now at $5.60+
Buy the March ’06 $360 put for $14 // Now at $14.50
The $360 put peaked out at $17 and we stopped out at $16.3o yesterday for a $2.30 profit.
The $450 never dropped back to $17 (lucky for us) and is now worth $26, a $9 profit!
We can’t sell it though because we have the obligation on the call we sold. The $470 is now worth $8.60, a huge profit for that guy!
At this point we can buy him out and close out, taking the $3 hit to our $11.30 profit or we can wait it out. I’m for waiting it out with tight 10% stops. If our friend ends up in the money, we will always have a $25-35 advantage in the least.
So that’s a nice $8.30 profit on a $28 investment in 2 trading days – not a bad way to hedge!
Tomorrow will be very dicy with lots of optionholders being forced to sell shares they can’t afford but the buying has been intense so I couldn’t tell you which way to play it!
