June 19th 2006 - GD
Dykstra picked the November 55 Call for GD General Dynamics Corp.
Read the column here.
Option price: $11.50 (or better)
Stock closing price: $66.12
Approximate premium: .38-cents (calculation: 66.12 - (55.00 + 11.50) = .38)
Dykstra notes that this particular option hasn't traded in a while and he is going to let it come in to his $11.50 price to purchase and not chase it. The current bid is $11.70 with an ask of $12.00 so it will have to come down a bit to reach the target buy price.
June 20th update - The option price hit $11.50 today as Dykstra was looking for. Exactly 10 contracts were sold it appears, so maybe his order got filled today. The ask price for the option has already gone back up to $11.70. The stock was down today and closed only slightly off its low for the day. So, the game is on here with this pick. Dykstra would be looking for an increase in price from the $65.21 level to anywhere above $66.21 to make his $1000.
June 21st Update - GD closed up $0.31 today and the option also reflects that with the last trade at $11.80, with the current ask at $11.90, but only $11.70 at the bid. So far so good for Dykstra.
June 26th Update - As Dykstra mentioned in his column today, the GD option closed at $12.10 on Friday the 23rd, only .40-cents from the target. Today however, the stock was down 0.82-cents and the option value fell to $11.00 with a bid of $10.80 and ask of $11.10. A pretty big drop in the option value compared to the stock price drop but only on volume of 13.
June 29th Update - GD closed up $1.27 today at $65.33. The option Ask price is $11.60 with a bid of $11.40. It only traded as high as $11.00 today though. Even though the stock is down 0.79-cents from the time the option was purchased, the ask price for the option high. The upbeat market today may be the reason for that.
July 6th Update - GD surpassed the $12.50 option price today easily and hit a high of $13.30 when the stock rose over $2 today. Another successful pick from Dykstra!
posted by CramerTracker @ 6/19/2006 08:42:00 p.m.
3 comments
3 Comments:
Im a little uncomfortable getting financial advice from someone with the first name "Lenny".
Haha. Not to mention a former professional athlete I would say! I was a little confused at first when I started hearing Cramer mention him as a special writer for thestreet.com but I really like the concept of the strategy, not that I would go out and buy 10 contracts for every pick he makes since he does pick some expensive ones. Basically he has only made a few bad picks...and mostly with Intel which just won't turn the corner, otherwise he has a very good record if you ask me. I think it makes more sense to follow (not always buy, and do you own homework too) someone that only makes 1 pick a week, unlike Cramer how has to make 2-3 main picks a day. And not to mention, if you are uncomfortable with options, it may be worth just buying his pick straght up....just an idea but a pretty expensive one.
Another good post.
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