An Aggressive Trade

Add ICE Calls

By Bryan Bottarelli
Tuesday, September 25, 2007 11:12 AM EDT
Tue, 25 Sep 2007 15:12:00 GMT

Dear Bottarelli Research Member,

You’ve probably heard me say this before, but one of the most powerful stocks out there is InterContinental Exchange (ICE – NYSE). Right now, a series of critical events are happening today — and they could all lead to aggressive upside movements for the Internet-based electronic futures trading firm. I want to participate in the profits, so here’s the scoop:

ICE

First up, ICE will be added to the S&P 500 index after the close of trading today, which means that any fund indexed to the S&P 500 must now establish a position in ICE. Secondly, ICE has broken strongly above its 50-day moving average today, which signals a possible return to its July highs of $170.00. And finally, Borse Dubai’s recent 19.9% stake in the NASDAQ Stock Market (NDAQ – NASDAQ) could lead to further Middle Eastern exchange investments, especially in high profit-margin derivative exchanges like ICE. With all three upside triggers occurring at once, I’d like to take a speculative trade on out-of-the-money ICE calls. If the upside momentum continues, we could have an explosive winner on our hands, so here’s the play:

PLAY: Buy the ICE October 155 Calls (IHH JK) at or under $6.00, good for the day. Current bid/ask spread is $5.40 to $5.70. Place a protective stop limit at $2.60.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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