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Let's Take Some Gains

Written By Brian Hicks

Posted July 21, 2008

In the weeks preceding our options product launch, we’ve been issuing trades in this free blog. And to secure our hard-earned gains, we’re closing five of our positions today.

Thirty nine days after urging caution over the Barry Diller / Expedia rumors, we picked up the Expedia October 22.50 put (UEDVX) at $1.80. It now trades just above $5.10 for a gain of 183%. Bank it.

On tough trends, we also spoke of Coca-Cola Enterprises, picking up the November 20 put (CCEWD) at $1.05. Thirty nine days later, it’s at $3.80 – good for a 262% gain.

Thirty five days ago, we urged caution after the Masco Chairman bought 300,000 shares of the company between $17.80 and $17.99. We believed that unless the stock could hold multi-year support, the stock would drop further, as it did. It now trades at $15.86 and is headed lower.

Following that report, we bought Masco October 20 puts (MASVD) around $3.00. It now trades at $4.70 – good for a 57% gain.

On June 3, we recommended buying the October 25 put (LYHVE) with the following argument. “It’s only a matter of time before Lehman (LEH) joins the latest list of casualties,” we said.

“Having just broken multi-year support levels, the underlying stock could be headed to $20 near-term. The best way to trade the possible drop is to buy the October 25 put option (LYHVE). This is an aggressive trade.”

After rising as high as $13 and change, the put now trades at $8.40 – good for a 180% gain.

We also recommended a buy on the UBS AG September 2008 22.50 put on June 10, 2008. At the time, it traded at $1.30. It now trades at $1.70 – good for a 31% gain.

Congratulations on the gains. Hold all other recommendations from your free Options Pit blog.