Take FXI Profits

Lock in Fast Put Gain

By Bryan Bottarelli
Tuesday, August 28, 2007 2:58 PM EDT
Tue, 28 Aug 2007 18:58:00 GMT

Dear Bottarelli Research Member,

The markets have continued to weaken throughout today’s trading session, triggered by the release of the FOMC minutes from their August 7th meeting. As we already know, Fed policymakers feel that inflation remains the most significant policy concern — but what’s interesting is that the minutes released today do not include any discussions among Fed officials surrounding their emergency rate cut on August 17th.

So in a way, today’s worsening market conditions are being fueled by old information — and that’s why I’d like to maintain the September call positions that we added to this afternoon. But in the meantime, we have yet another short-term gain on our FXI September 146 Puts (FFP UP), and I think it’s a good idea to use any closing-day weakness to lock in our profits.

FXI

As you know, we entered the FXI puts this morning for $8.70, and since our entry they’ve traded as high as $9.90. As I write, they’re trading between $9.40 and $9.70, so let’s try to split the bid/ask difference and lock in a sale price at or above $9.60. This would hand us a quick 9% gainer in a down market, so let’s take this profit and run!

PLAY: Sell your FXI September 146 Puts (FFP UP) at or above $9.60, good for the day.

Also, for anyone still holding the BEN September 130 Puts (BEH UF), they’re now trading in the black, so I’ll continue to follow this position for all of you who are still holding. Plus, our MCO September 50 Puts (MCO UJ) are just about to turn profitable as well, so maintain this position for more gains.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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