For Speculators Only

Add CLF Puts

By Bryan Bottarelli
Tuesday, April 29, 2008 11:01 AM EDT
Tue, 29 Apr 2008 15:01:00 GMT

*SPECULATIVE PLAY: Buy the CLF May 145 Puts (CGJ QI) at or under $3.70, good for the day.

Dear Bottarelli Research Member,

Every once in a while, it makes sense to swing for the fences — and I think we have that opportunity right now in shares of Cleveland-Cliffs (CLF – NYSE). If you’re unfamiliar with CLF, they’re a mining company that produces iron ore pellets and metallurgical coal for the steelmaking industry. As you can see, the stock has put in a strong upside run lately — but what strikes me is the fact that CLF hasn’t experienced the same level of weakness compared to the other high-beta stocks that I follow. Therefore, we could see a series of downside days in CLF — starting with today’s initial downside move. As a highly speculative play, I’d like to enter into CLF May puts.

CLF

Now remember, I designated this as a “speculative” trade because CLF tends to make big moves, both up and down. Therefore, if you’re not willing to take on the added risk, then sit this one out. But if you are willing to take on a little more risk for a potentially higher reward, then here’s the play:

SPECULATIVE PLAY: Buy the CLF May 145 Puts (CGJ QI) at or under $3.70, good for the day. Place a protective stop limit at $1.60, but do not place a pre-determined sniper sell. I’d like to let this one run a little longer.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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