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January 26, 2010 11:20 EST Related Symbols: CHK
you're watching:
Mad About Options
An options-related take on Jim Cramer's latest recommendations and analysis on the latest securities and ETFs getting attention on the Street.
Find out Cramer’s take on Chesapeake and option trades for bull and bear investors.
Mad About Options takes a look at the stocks getting coverage from Jim Cramer, Fast Money casts and other heavy hitters in the financial press and reviews strategies option traders might have used if they agree or disagree with these assessments of the underlying stocks.
The Pick – Chesapeake (CHK):
On Jan. 20, Mad Money host Jim Cramer said the hedging strategy to CHK “mystifies” him, but if a natural gas act comes up by Memorial Day, the stock could go up as high as 50%. CHK shares were trading at $27.66 at the time of Cramer’s call.
BULLISH Option Trading Idea for CHK:
Bull call spreads –
Maximum risk: $15.40 plus commissions
Maximum potential profit: $4.60 minus commissions
Breakeven: The strategy will be profitable if CHK shares are trading higher than $25.70 at April expiration.
BEARISH Option Trading Idea for CHK:
Put one-by-two –
Maximum risk: $18.90 plus commissions
Maximum potential profit: $3.10 minus commissions
Breakeven: The strategy will be profitable if CHK shares are trading higher than $18.90 at July expiration.
For more trading ideas and breaking news on the options market, stay tuned in to The Options News Network.
