Our proprietary models have pulled up three more option plays for the Sept/Oct calendar which merit mention.
Acordia (NASDAQ : ACOR) is our first pick. Our models are bullish on this stock and our strategy is to use a SHORT BULL CALL RATIO SPREAD. We would BUY the $30 strike Oct expiry Calls and SELL the October expiry $25 strike calls.The strategy would not cost us anything while allowing us to experience unlimited upside potential.The premium for the Oct 25 in the money options even gives us a nice profit depending on the number of options that are long and short.The exposure to the short call is acceptable as we would be owning more CALLS in a higher strike than the number short.The strategy requires a greater number of $30 strike options to be purchased than the $25 options that are being written.
Zoltek (NASDAQ : ZOLT) we would be adopting a similar strategy.Our models are bullish on this stock and we will adopt the SHORT BULL RATIO SPREAD. We would BUY the $12.50 strike Sep ' 09 expiry calls and SELL the $10.00 Sep' 09 expiry calls.The ratio of short vs long can be determined by the buyer, however, be sure to BUY a greater number of the $12.50 Sep ' 09 expiry. This would again allow us to experience upside without any upfront cost.
Potash (NYSE: POT) is our last pick of the day. Our models are bullish on this as well.With POT we adopt the same strategy and BUY the Oct '09 expiry $120 strike CALLS and SELL the Oct '09 expiry $115 CALLS.Again BUY a greater number of calls than you would SELL.
Disclosure - We do not own any positions in the above mentioned stocks as of today.