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DARK HORSE HEDGE – Ridin’ the Storm Out, WDC

By Sabrient
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DARK HORSE HEDGE – Ridin’ the Storm Out, WDC

By Scott Brown at Sabrient, and Ilene at Phil’s Stock World

 

Ridin' the storm out, waitin' for the thaw out
On a full moon night in the rocky mountain winter
Wine bottle's are low, watching for the snow
Thinking about what have I've been missing in the city

And I'm not missing a thing
Just watchin' the full moon crossing the range
Ridin' the storm out, ridin' the storm out
Ridin' the storm out, ridin' the storm out

Ridin' the Storm Out, REO Speedwagon 

Dark Horse Hedge recommended Western Digital Corp (WDC) on July 13, 2010 at $31.90 and have been on a course of “ridin’ the storm out” since.  Long term, we still want to own WDC in our virtual portfolio and so on August 17, 2010 we recommended selling Oct $26 calls for $1.61 to earn some option premium while “waitin’ for the thaw out”.  With option expirations on Friday, DHH is recommending rolling the Oct $26 call, which we have earned the time premium on, to the Jan $28 call.  We can gain the extra $2 in strike price in a “cashless” trade and continue waiting. WDC announces 3rd quarter earnings Tuesday, October 19 after the close with 24 analysts expecting $.81/share. 

BUY to cover WDC Oct $26 call (WDC101016C00026000) at the market Wednesday, October 13, 2010 (approximately $3.95)

SELL WDC Jan $28 call (WDC110122C00028000) at the market Wednesday, October 13, 2010 (approximately $3.65) 

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Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW) nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.

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