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Jim Cramer’s take on Fuel Systems Solutions, and how you can try out strategies on ONN.tv and OptionsHouse.com
Related Symbols: FSYS
ONN.tv Highlights Potential Trades on Fuel Systems Solutions
Jim Cramer’s take on Fuel Systems Solutions, and how you can try out strategies on ONN.tv and OptionsHouse.com
Aug. 17, 2009
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 – Fuel Systems Solutions (FSYS):
In an Aug. 13 edition of Mad Money, Jim Cramer said, “A natural gas subsidy bill is working it’s way through Congress, that could jump-start the commodity’s use here in the U.S. Fuel Systems Solutions would be a big beneficiary if the legislation were passed.” FSYS shares were trading at $30.45 at the time of this report.
Bullish Option Traders on FSYS:
Investors similarly bullish on FSYS could put on bull put spreads and sell two Jan. 2010 30 puts for $4.60 to buy two Jan. 2010 15 puts for 50 cents. Investors would collect $8.20 on this spread, which will be profitable if FSYS shares expire higher than $25.90. Maximum gain on this trade is $8.20 minus commissions, and maximum loss is $21.80 plus commissions.
Bearish Option Traders on FSYS:
On the bearish side, investors could employ a bear put spread, and buy Oct. 40 puts for $10.40 and sell Oct. 30 puts for $2.80 to pay $7.60 in total for the trade. These trades will be profitable if FSYS expire below $32.40. Maximum gain on this trade is $2.40 minus commissions and maximum loss is $7.60 plus commissions.
ONN.tv’s OptionFinder and OptionsHouse.com tools provide insight into return on investments, risk profiles and much more. Provide feedback on Jud’s strategies and questions on the tools at http://www.onn.tv/.
For more trading ideas and breaking news on the options market, stay tuned in to The Options News Network.
|
If you AGREE with Cramer…
Strategy: bull put spreads
|
|||||
| Leg | Action | Expiry | Stk | Call/Put | Strike |
|---|---|---|---|---|---|
| Leg 1 | Sell | Jan 2010 | FSYS | Puts | 30 |
| Leg 2 | Buy | Jan 2010 | FSYS | Puts | 15 |
| Premium: | $8.20 | ||||
| Break Even: | above 25.90 at Expiration | ||||
| Max Gain: | $8.20 minus commissions | ||||
| Max Loss: | $21.80 plus commissions | ||||
|
If you DISAGREE with Cramer…
Strategy: bear put spread
|
|||||
| Leg | Action | Expiry | Stk | Call/Put | Strike |
|---|---|---|---|---|---|
| Leg 1 | Buy | Oct | FSYS | Puts | 40 |
| Leg 2 | Sell | Oct | FSYS | Put | 30 |
| Premium: | $7.60 | ||||
| Break Even: | below $32.40 at expiration | ||||
| Max Gain: | 2.40 minus commissions | ||||
| Max Loss: | $7.60 plus commissions | ||||
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