Addressing JASO’s Earnings

Trim Exposure Going Into Tomororw

By Bryan Bottarelli
Tuesday, March 11, 2008 2:55 PM EDT
Tue, 11 Mar 2008 18:55:00 GMT

PLAY: Sell HALF of your JASO April 15 Calls (QJP DC) at or above $1.95. Hold the second half into tomorrow’s earnings announcement.

Dear Bottarelli Research Member,

Our decision to add to our JASO April 15 Calls (QJP DC) is paying off today. As I write, these calls have traded as high as $1.90, finally handing us an overall gain on our entire position.

Now, as I reported, JASO reports earnings tomorrow before the bell. As a result, we could begin the day with either a big jump — or a big dip — on the shares. With the market hitting new intra-day highs going into the last hour of trading, it appears like the bulls have successfully defended today’s increase and are now looking to push the major market averages higher for the rest of the week. Of course, this market bullishness could have no effect on JASO if their earnings come in weak tomorrow, so based on this situation, here’s what I’d like to do.

JASO

In light of our JASO calls (which were a position that we added to), I’d like to take the safe route and sell HALF of our calls into today’s market upside. This would help you to limit your total exposure on this position and at least lock in a slight gainer. Then, going into tomorrow, we’ll see if JASO can impress the Street and increase share prices even more. Of course, you can certainly hold off until tomorrow on your call sale, but I think the smart and safe course of action is to close HALF of your position now — and hold the second half into tomorrow. Therefore, here’s the play:

PLAY: Sell HALF of your JASO April 15 Calls (QJP DC) at or above $1.95. Hold the second half into tomorrow’s earnings announcement.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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