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Trade of the Day: McDermott International (MDR)

Try MDR options to get paid on the downside


Every week, I scan thousands of potential option plays with a proprietary, scientific approach that removes the guesswork and allows my powerful software to identify the best buys.

McDermott International (MDR) is an engineering, procurement, construction and installation (EPCI) company that plans and executes all of the operations that go along with offshore oil and gas projects. My Power Options scanner shows that MDR stock is among the weakest I follow, but the crowd appears not to have caught on yet as its put options are very attractively underpriced.

Recommendation: Buy MDR August 8 put options at 50 cents or lower. After entry, take profits if the stock price hits $7.60 or the option price rises to 90 cents. Exit if the stock price closes above $9.00 or the option price falls to 40 cents.

If a profit target is hit intra-day, exit and take profits immediately. If the position closes at or below the stock-based or options-based stop loss, exit the trade the next morning at the open.

InvestorPlace advisor Ken Trester has launched Power Options Weekly. This brand new weekly service delivers 5 new trades to you each Friday. It’s the perfect ‘bridge’ between investing in ordinary stocks and the turbocharged world of options trading. 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. Try Power Options Weekly today and receive 2 weeks for the price of 1 for only $19.95.

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