Quick Short Play Paying Off

Get Ready to Sell WYNN Puts

By Bryan Bottarelli
Thursday, January 18, 2007 1:38 PM EST
Thu, 18 Jan 2007 18:38:00 GMT

Dear Bottarelli Research Member,

Our quick downside play on WYNN is paying off.

The WYNN February 105 Puts (UWY NA) that we entered this morning for $4.20 have traded as high as $5.10 in today’s action — as WYNN stock is currently lower by $1.73. A sale at $5.10 on these puts would hand us a 21% gainer in a matter of hours, so let’s go ahead and look to lock in our quick gains at these levels.

PLAY: Sell your WYNN February 105 Puts (UWY NA) at or above $5.10, good for the day. If these prices do not trigger, then maintain your orders into tomorrow’s open.

In other positional news, our MRO April 90 Calls (MRO DR) have had quite a volatile day — as the oil supply data dropped the oil sector across the board. I personally thought that this supply data had already been priced into the markets (thus the $50 oil prices), but I guess we needed to re-test the $50 level once again. Luckily, the April expiration allows us to withstand the increased volatility, so maintain the MRO position.

On the same hand, our TIE February 30 Calls (TIE BF) continue to tread water — meaning that no significant up or down move has yet to change my thesis on the trade. What has be encouraged is that TIE is experiencing high levels of insider buying, which signals that management feels the stock is undervalued at current levels. Maintain your TIE calls.

Additionally, our BBI January 2008 10 Calls (YCQ AB) continue to look good, as we’re approaching a double on this play, and our CHINA January 2008 7.5 Calls (WRW AU) also are in the black. The one position that we have to let go is the SNDK April 47.5 calls (SWF DW), as the weakness brought out by Intel yesterday and Apple today has carried into the entire tech sector — thus stopping us out on SNDK. If the markets begin to experience continued weakness, we’ll shift our attention more towards overweighting the put side of the ledger to take advantage of the sell-off. This way, we can continue to profit in both up and down markets.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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