Daily Stock Market Equity and Options Trading Commentary

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Wednesday, February 25, 2009

Stocks/Options I'm Buying Soon

I have been doing some research and have some ideas for the coming month or so...

First of all, I like Visa in general so the common stock symbol V should be a good one to own going forward, but I want to speculate with the March 67.50 Call options so I am trying to buy a couple hundred contracts for $5 a piece. With the market getting hammered and falling below its November lows, Visa did not come close to its 52 week low set January 23, 2009. So I am hoping a bottom is in for Visa.

Another name I am going long on is Caterpillar symbol CAT. I think at these levels and that dividend yield the stock is more than a bargain! I have been selling PUTS for the Leap 10 35 Strike and I received a premium of $12.80 a share meaning if I do get the stock my cost per share is $22.20. I think with the price of gold set to sky rocket, the demand for heavy equipment such as CAT's great mining equipment could also increase.

Finally, I think it is time to get long black gold or Crude oil. One fund I have been buying calls on for the July 30 strike is USO. USO description from TDAmeritrade: "The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil. The fund is nondiversified." I think Crude will be stronger getting into a busier driving season like spring/summer, and will peak sometime by July. The contracts expire July 18 which gives ample time to trade these, so even if crude gets hammered even more it may bounce back very strong. I think we could see crude get to 60 a barrel by then.

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