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I am an independent Equity analyst/Trader who has been in the market since 1999. I am generalist and have a leaning toward any sector that can give us extraordinary returns.
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Guru Daily Trades
  • Daily Trade  0 comments
    Jun 2, 2009 11:55 AM | about stocks: DRYS, DIA

    While we call our blog Guru Daily Trades, the intention is to post trading ideas on a daily basis rather than to indicate the duration of our trades. Our proprietary models use both technical and fundamental indicators to screen trades that are simple to execute and understand although the input and analysis for these ideas are extensive.

    Dow Diamonds Trust (NYSEARCA:DIA) Options Trade

    With the General Motors bankruptcy behind us our proprietary models are indicating that the market will trade higher through July making July calls on the Dow Diamond Trust (DIA) exchange trade fund quite attractive.

    We specifically are attracted to the DIA July 90 Calls to be accumulated when there are dips in the market.

    DryShips (NASDAQ :DRYS) July Call options

    We are bullish on this dry bulk shipper who was subjected to downgrades. Our models and analysis indicate a jump in the bullish direction in the next two months making July calls attractive.

    We would be buyers of July 8 calls. For those with strong stomachs the July 7 Puts offer a good premium if one chooses to sell these puts and cover the cost of the calls. A naked Put write is fine if we believe that the stock is heading upwards in the short term. In one sense it is not naked as most brokers would expect you to have the money to buy the underlying stock before writing a put.

    A second strategy would be to buy a Bullish Credit Spread. Buy the July 10 strike price calls and sell fewer number of July 8 strike price to cover the cost of the July 10 calls.We do expect the stock to go above $10.00 before option expiry on July 17, 2009. If our strategy and expectations play out we will also pocket the premium from the July 8 calls.

    If you want to play this on both sides, you can buy the July 10 calls and the July 7 puts and limit your exposure to the premium while playing both sides.

    Stay tuned for more trades everyday.

    Disclaimer - This is not a recommendation to either buy or sell the mentioned securities. We are merely sharing our trading strategies with other like minded individuals who may have the experience and appetite for extraordinary risk and rewards that options offer.We do not have any positions in the above mentioned stocks.

    Stocks: DRYS, DIA
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