A Truly Speculative Trade

Play BG July Calls

By Bryan Bottarelli
Monday, June 23, 2008 2:58 PM EDT
Mon, 23 Jun 2008 18:58:00 GMT

PLAY: Buy the BG July 110 Calls (BG GB) at or under $6.00, good for the day.

Dear Bottarelli Research Member,

When it comes to today’s trading in shares of Bunge (BG – NYSE), you truly have one of the craziest intra-day price ticks you’ll ever see. The stock began the day trading higher by $4.00. But then, news broke that the fertilizer and oilseed processor agreed to buy Corn Products International (CPO – NYSE) in a $4.4 billion stock deal, and the stock did a $18.00 turnaround. Check it out:

BG

With this deal, you have two of America’s oldest agricultural companies joining forces to establish a $30 billion-a-year agricultural giant. This single transaction will blast Bunge from #255 on Fortune’s list of largest U.S. companies (with $26.3 billion in revenues last year) into the top 100. Obviously, BG’s management would not agree to this deal if it was harmful for shareholders, but nevertheless, we’re seeing a major “sell on news” scenario unfold today. Therefore, for those speculative investors with a higher tolerance for risk, I see this as an opportunity to add the BG July 110 Calls (BG GB) for a fire-sale price. This morning, for example, these calls traded for a high of $18.00. But now, you can pick them up for less than $6.00. To me, this is a classic case of headline over-reaction, and for speculative traders, it represents an opportunity to play a quick bounce. Therefore, let’s take full advantage by entering the BG July 110 calls now!

PLAY: Buy the BG July 110 Calls (BG GB) at or under $6.00, good for the day. Place a protective stop limit at $3.50.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From June 2008