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Daily Stock Market Equity and Options Trading Commentary

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Monday, July 20, 2009

Mid Day Stock Options Watch July 20, 2009

I'm looking at selling option straddles on the Citigroup Inc. (C) August 3's. Volume once again is very high for Citigroup and the August 3 call and August 3 put option contracts are amongst the highest traded. I would like to see Citigroup return to the 3 range (give or take 10 cents a share), and I think I'll be selling both [naked] puts and calls on Citigroup for the August 3 strike. The reason for this is that option premiums are high, and as of now I could sell this straddle for $63 per contract. Citigroup is a zombie bank and the stock has traded in the 2.50-3.00 range. If it continues to trade in this range and I can sell these puts for $65 per contract around the $3 per share price, I'll profit as long as Citi continues to trade in that range. Waiting patiently, but this is my mid day stock options watch for July 20, 2009.

Also checking out selling the Citigroup Option Strangle for the August. Selling [naked] August 2 put and August 4 call options. Premium is currently $10 per contract, still not enough. Would like to see it double to $20 per contract and Citi around $3 per share.

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