The Big Question

A Speculative Play on ICE

By Bryan Bottarelli
Wednesday, October 01, 2008 12:14 PM EDT
Wed, 1 Oct 2008 16:14:00 GMT

PLAY: Buy the ICE October 85 Calls (ICE JQ) at or under $4.90, good for the day. Place a protective stop limit at $2.10, but to not place a per-determined sniper sell at this time.

Dear Bottarelli Research Member,

Here’s the million-dollar question…

“If the bailout bill passes, which stock will soar the most?”

In my view, the surprising answer is Intercontinental Exchange (ICE – NYSE).

Think it through with me.

First off, you already know that ICE owns and operates an Internet-based global electronic marketplace that trades futures in crude and refined oil, natural gas and power, sugar, cotton, coffee, cocoa, orange juice, and other foreign exchange and index products. Therefore, a bailout plan will spark a new flood or trades into all of these sector groups.

Secondly, passage of the bill is certainly inflationary, which could spark an up-tick in oil prices. This will be a bullish catalyst for ICE as well.

Third, the stock is just looking for a reason to blast above its 50-day moving average, and the bailout bill could do the trick.

And forth, we all know that when ICE gets momentum on its side, the stock can run hard. Case in point, just look at the intra-day move up to $110.00 in mid-September. A similar upside move could be on the horizon.

ICE

Throw it all together, and I think the speculation is worth the risk. Therefore, as a more speculative play that could achieve strong and powerful returns, lets’ go ahead and add October ICE calls to our ledger now.

PLAY: Buy the ICE October 85 Calls (ICE JQ) at or under $4.90, good for the day. Place a protective stop limit at $2.10, but do not place a pre-determined sniper sell at this time. If the markets move aggressively higher, I’d like to let this one run. Therefore, I’ll manage it within our daily trading alerts.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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