A strategy idea for options trading investors.
Profits Taken on Current Position: AutoNation (NYSE: AN)
AN hit its target price Thursday and the AN Oct 40 Call was closed for a 46% profit. Sell-to-close your position now and take all of your profits if you have not already done so.
Recommended Fast Options Trade: W. R. Grace (NYSE: GRA)
GRA has been in a nice uptrend since September. It recently broke to new highs after consolidating for a few weeks and should continue moving higher if stocks continue to rally. Here is the best way to play more strength in W R Grace…
Buy the GRA Sep 50 Call up to $1.75 ($175 per contract).
After taking the position, enter a good-til-cancelled contingent order to sell this option if the stock hits its target price of $51. That should give you an option price of about $3.40, for a 94% profit.
Close this position and cut losses if the stock closes below $45.90, when the option price should be about $1.10. The stock is currently trading at $47.57. The computer-simulated probability of this option hitting its target price is 24%.
Recommended Fast Options Trade: Mattel (NASDAQ: MAT)
MAT recently broke above resistance at $27 and has been moving higher. It should continue moving higher if the market does also. Here is the best way to play more strength in Mattel…
Buy the MAT Oct 30 Call up to 60 cents ($60 per contract).
After taking the position, enter a good-til-cancelled contingent order to sell this option if the stock hits its target price of $29.50. That should give you an option price of about $1.20, for a 100% profit.
Close this position and cut losses if the stock closes below $27.30, when the option price should be about 40 cents. The stock is currently trading at $28. The computer-simulated probability of this option hitting its target price is 22%.
** All of our short-term recommendations can be taken for up to three days after they are recommended. Make sure the stock and option prices are close to where they were when we made the recommendation. If after three days you still have not gotten the position filled, cancel the order and wait for our new recommendations, as the profit probabilities may no longer be valid.
Action to Take on Current Position: Nvidia (NASDAQ: NVDA)
Sell-to-close the NVDA Sep 14 Put. The position reached its three-week maximum holding period Thursday without hitting its target price.
Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.
