A New Play on DRYS

Add October Calls Now

By Bryan Bottarelli
Thursday, September 27, 2007 2:18 PM EDT
Thu, 27 Sep 2007 18:18:00 GMT

Dear Bottarelli Research Member,

Many of the upside stock candidates that I mentioned yesterday have continued to make very strong advances today, notably Wynn Resorts (WYNN – NASDAQ) and Southern Copper (PCU – NYSE). But while I continue to follow these two high-flyers for trading opportunities, I think it’s time to move on DryShips (DRYS – NASDAQ).

DRYS

Headquartered in Athens, Greece, DRYS operates a fleet of 35 dry-bulk carries that ship commodities like coal, iron ore, grain, bauxite, phosphate, fertilizers, and steel. With a combined deadweight tonnage of approximately 3 million, DRYS is the strongest publicly-traded dry-bulk shipper that’ll continue to benefit as the world population and economy expands at a rapid pace. The company just announced a quarterly cash dividend of $0.20 cents per share on Monday, and this could be the trigger that takes the stock up to a new 52-week high. Let’s play this upside using October calls. Here’s the play:

PLAY: Buy the DRYS October 90 Calls (DQR JR) at or under $5.60, good for the day. Current bid/ask spread is $5.00 to $5.40. Place a protective stop limit at $2.90.

Also,our MICC October 80 Calls (CQD JP) just triggered for $6.10, so if you were not able to execute this sale this morning, you’re getting a second exit opportunity now. And along the same lines, our ICE October 155 Calls (IHH JK) have traded as high as $6.50 today, so if you’re still holding this position, look to take your profits off the table as well.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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