[Buying LEAPS Calls on Micron (MU)/Buying to Open the Jan '08 10 Calls (WGYAB)/Day Order/Limit $6.50]
Dear Member:
Micron (MU) has bounced off its' uptrend line. Earnings are scheduled to be announced in a couple weeks and I am looking for a little run up in advance of the earnings announcement. I am placing an order to buy the Jan '08 10 calls (WGYAB)that are currently about $4.89 in the money and have a delta of around .87. I see a first upside target around $16 so the reward to risk ratio looks decent to me. My initial exit would be on a drop to about $14.39. Mathematically,using a delta of .87, my loss on a reversal could be around 45 cents and my gain at first target could be around $0.97.
DISCLOSURE: At the time of publication, I have no position in the referenced LEAPS or the underlying stock.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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