Daily Stock Market Equity and Options Trading Commentary

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Friday, November 28, 2008

Looking Ahead to Christmas...

Today is Black Friday and it seems things haven't changed too much in this horrible recession. I understand that everything is largely discounted but at least people are buying anything at all... Anyway with this market trading on its last day for November and a short day if that, I'll suggest a call I purchased today and I am confident will expire in the money making me some extra holiday spending money... Today I purchased 20 contracts of the Visa December 55 Call for $80 per contract. I am speculating that between now and Christmas Visa will give positive outlook that they have achieved record sales of their gift cards- that of which Visa gets a hefty $5.95 premium for a piece of plastic (almost pure profit for the firm), not to mention the transaction fees when someone uses the card. I assume Visa to give this outlook or for an analyst to say something along the lines of this. I purchased the rights to Visa for a premium of 80¢ a share, but I'll sell 3 quarters of my position at around $1.30 premium per share, giving me a profit and letting 5 contracts ride for free.

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