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June 16, 2009 1:22 EDT Related Symbols: HD
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.
Home Depot in Review
Recapping Jim Cramer’s Home Depot (HD) Pick and Corresponding Option Plays
June 16, 2009
Mad About Options takes a look at the stocks getting coverage from Jim Cramer 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 – Home Depot (HD)
In the March 31 broadcast of Mad Money, Jim Cramer told viewers that housing is “nearing a bottom” and he endorses “building a position in HD.” In the past two-plus months, HD shares climbed to $24.15 from $23.56, making this a 2% winner (so far) for Mr. Cramer and HD bulls.
Bullish Option Traders:
Option traders who were similarly bullish on HD sold the May 22.5 puts for $1.15 per contract, meaning they collected that amount on the trade. The put expired at zero dollars, which makes this trade a winner of $1.15, with the stock up 59 cents.
Bearish Option Traders:
On the con side, investors bought Aug. 30 puts for $7.20 per contract and sold the Aug. 24 puts for $3.10 per contract, which means they paid $4.10 for this spread. The put spread is now marked at $4.50, making it a winner of 40 cents with the stock up 59 cents. Both turned out to be winners!
For more trading ideas and breaking news on the options market, stay tuned in to www.ONN.tv.
