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By Jim Woods
The smell of a freshly trimmed field, a brisk fall wind in the air and the sound of thousands of roaring fans can mean only one thing — football
season is back! For thousands of hardcore gridiron addicts, there’s nothing like the clashing of helmets, circus catches, elusive runs and bone-jarring
hits to get the heart rate going.Of course, if you’re reading this, you also have a penchant for making big profits in options, so we figured we’d combine two of America’s favorite
pastimes: football and making money. That’s why we are proud to bring you these 10 Touchdown Trades from our very own all-pro options trading team.You’re about to get touchdown passes thrown to you from Andrew Houghton and Nick Atkeson; a blitz of a trade from Tobin Smith; a punt return from
Chris Johnson and Jon Lewis, and several scoring drives from Michael Shulman. It’s just the OptionsZone way of celebrating the start of the hallowed
football season. So, without further ado, let’s blow the whistle and kick off right now!
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#1 Apple (AAPL)
By Chris Johnson and Jon Lewis
What does Apple (AAPL) have to do with football? Well, for one, my (John) favorite team — the New
York Giants — hails from the Big Apple (yeah, I know they play in Jersey). Second, how could all those shy and reserved NFL’ers, such as Terrell
Owens and Chad Ochocinco, Twitter with their hordes of followers without their precious iPhones?Apple is state of the art when it comes to putting smartphones into the willing hands of those who want the latest in technology. And they’re second
to none when it comes to making those applications diehards crave … at a price.The only thing more in demand than the iPhone is Apple shares. The stock is certainly on a roll. The shares have more than doubled off their March
low and are sitting at a 15-month high. And hardly a day goes by without some analyst raising their price target for the stock. Don’t let Apple’s
momentum pass you by. Jump on board with the AAPL Jan 200 Calls (APVAT).
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#2 Research In Motion (RIMM)
By Tobin Smith
True sports fanatics are big-time smartphone users. How else can we check for scores and updates, watch ESPN clips and keep up with our fantasy
leagues while we’re on the go? Since Chris and John already covered Apple (AAPL) — and I completely
agree with them — I’ll recommend the other smartphone heavyweight Research In Motion (RIMM).RIMM’s BlackBerry has a firm hold on the smartphone market, and even with the iPhone and the new Palm (PALM)
Pre, the BlackBerry is not going anywhere. Hey, they don’t call it a CrackBerry for nothing. So, take a hard look at RIMM calls.
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#3 Cerus Corp. (CERS)
By Michael Shulman
I’m a New York Giants fan, and they have one of the top defensive lines in the NFL. But we’re here to talk stocks, so let’s talk about the company
with the best defense against contaminated blood. Cerus Corp. (CERS) is a pioneer in something called "pathogen
inactivation." Translation: They have a technology that enables them to clean blood, which could make the world’s blood supply almost completely
immune to viruses, bacteria, AIDS … even swine flu.CERS is hot — up 450% in the past year. It is a microcap, so it trades like one, but that also means it’s a stock that has the potential to deliver
options-sized returns. Go for it — I see $10 in CERS’ future. (Full disclosure: I own this baby.)Learn more about why CERS is One Penny Stock You Have to Own.
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#4 ValueClick (VCLK)
By Andrew Houghton and Nick Atkeson
We think you should go deep with ValueClick (VCLK). This company is one of the last important and
independent Internet commerce plays. With the advertising market generally gaining strength and the secular shift of advertising from traditional
media to the Internet, VCLK is well positioned.VCLK has regularly been a takeover target. Many of its peers have already been acquired during the past several years. An investment in VCLK carries
the potential thrill of seeing your investment streak into the end zone one day on a positive announcement. We like the idea of buying longer dated,
out-of-the-money call options on this company as a way to get in the game.Get the Top 9 Stocks to Trade This Fall.
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#5 Semiconductor HOLDRs (SMH)
By Chris Johnson and Jon Lewis
What goes better with football on a widescreen than your favorite beverage and a big bowl of chips? Since we couldn’t find any potato stocks to
recommend, we’ll have to go with the semiconductor kind of chip, which is ably represented by the Semiconductor HOLDRs (SMH).The semis have been hot of late, as SMH is up about 25% from its July bottom. The sector is at the forefront of the economic recovery, as companies
begin to open their wallets to tech spending once again. SMH has been a market leader, having outperformed the Nasdaq (NASD)
for the past five months. And with the fundamentals behind it, this leadership should continue.This is a great time to hop aboard SMH as it just pulled back to its 20-day moving average. I guess you could say that it’s time to buy the dip
in chips. Go with the SMH Jan 25 Calls (SMHAE). Bon appétit!
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#6 Cepheid (CPHD)
By Michael Shulman
Last football season, the killer staph infection MRSA was making headlines and had everyone in the locker rooms nervous. Diagnostics company Cepheid
(CPHD) has the world’s best and fastest test for the "super bug." The company also just introduced
a test for the more common C. difficile, an intestinal infection.On Oct. 1, Medicare will stop paying for hospital-acquired infections (HAIs), with the exception of MRSA. So when it comes to an HAI like C. difficile,
hospitals will want to increase testing so they don’t end up footing a big bill. And while Medicare will continue to pay for treating MRSA, a test
will obviously be needed in order for the hospitals to bill Medicare. This is very good news for CPHD.CPHD is a $14 stock that’s worth $25-$30. Look at call options that expire in the first quarter of next year (Full disclosure: I own CPHD calls.)
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#7 Marathon Oil Corp. (MRO)
By Andrew Houghton and Nick Atkeson
The U.S. dollar is weak and oil is strong. Marathon Oil Corp. (MRO) is one of the large integrated
oil companies that people don’t talk about. MRO just broke through the resistance
line and appears to be heading down field. As long as the U.S. government continues to issue more dollars, the dollar should continue to weaken,
opening avenues for further gains in MRO.MRO pays a 2.86% dividend and is undergoing explosive earnings growth. 2009 EPS is expected to be $1.92, and analysts are forecasting EPS to jump
to $3.57 in 2010. This puts the multiple on next year’s earnings at about 9x. This player has got what it takes to win in today’s game.
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#8 United States Steel (X)
By Chris Johnson and Jon Lewis
Like my (Chris) favorite football team — the Pittsburg Steelers — United States Steel (X) is ready
to perform well in the near term. While there have been reports of declining steel prices, demand for base metal has been on the rise as the manufacturing
sector worldwide begins to ramp up production. We like allocating assets to basic materials companies such as U.S. Steel to benefit from continued
economic strengthening.Buy the X Jan 55 Calls (XAK) on U.S. Steel to leverage the continued strength from this market leader.
You can use the profits from this trade to host a Super Bowl party to watch the Steelers put a seventh ring on Dan Rooney’s hand!
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#9 SPDR Lehman High-Yield Bond ETF (JNK)
By Andrew Houghton and Nick Atkeson
The high-yield debt market has been running hard since March. Issuance is going through the roof and yields are coming down sharply. In the past
year, junk bond yields have fallen from roughly 20% to about 8.5% today. It looks like they are going lower as the market continues to get healthier.We recommend gaining long exposure to the SPDR Lehman High-Yield Bond ETF (JNK), which currently
pays a yield of 12.37%. After getting long JNK, you could write (sell) near-dated JNK puts to add a little extra return to your game-winning yield.Learn more about how to write put options.
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#10 Moody’s Corp. (MCO)
By Michael Shulman
In football, the special team players are the point men — always potential game-changers, but usually an afterthought to us fans. But when they
screw up — a fumble on a kickoff, allowing a blocked punt for a touchdown — boy, can they let the team down.The same is true of the credit-ratings agencies that spun AAA-rated gold out of subprime garbage. A day of reckoning is coming, though. A recent
court decision rejected these firms’ longtime claim that the First Amendment protected them from lawsuits. So, my advice is to short Moody’s Corp.
(MCO) through the purchase of put options. The stock is breaking down now, but I’d look at puts that expire
in the first quarter of 2010.Learn How to Pick the Right Put Option.
3 Cheap, Recession-Busting Stocks. These low-priced stocks are truly undervalued. Get in now — before they’re discovered
and take off!
