Play CME Calls

Here’s One for the Speculators!

By Bryan Bottarelli
Tuesday, December 04, 2007 11:42 AM EST
Tue, 4 Dec 2007 16:42:00 GMT

Dear Bottarelli Research Member,

Moments ago, I issued (what I consider) a longer-term play on Loews Carolina Group (CG – NYSE). Now, I’d like to flip over to the opposite side of the spectrum and issue an explosive play for the more speculative traders.

When it comes to stocks capable of making huge intra-day moves, you typically think of names like Baidu.com (BIDU – NASDAQ) or Google (GOOG – NASDAQ). But the one stock that really raises the hair on your arm more so than BIDU and GOOG comes in the form of the CME Group (CME – NYSE).

As you probably know, CME is based here in Chicago and they offer futures in sectors such as interest rates, equity indexes, foreign exchanges, agricultural commodities, and energy. On October 25th, shares of CME hit a new 52-week high at $693.00 and it looks to me like CME will challenge this high going into the end of the calendar year.

CME

As you can see from the chart, a break above the $675 level could spark a run for $700, so I’d like to profit off this moving using the CME December 700 Calls (CWO LT).Currently trading between $5.30 and $5.80 per contract, these calls look attractive for a $675 stock — so as a speculative play let’s add them to our ledger now!

PLAY: Buy the CME December 700 Calls (CWO LT) at or under $6.30, good for the day. Place a protective stop limit at $3.10.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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