July 17 2006 - AA

Dykstra picked the October 25 Call for AA Alcoa Inc.
Read the column here.

Option price: $6.20
Stock closing price on Friday July 14th: $30.79
Approximate premium: .41-cents ($30.79 - (Strike $25.00 + $6.20) = $0.41)

The option has already dropped on the first day of the recommendation and is trading at $5.90 currently with a bid of $5.70 on high volume for the option. It seems Dykstra is getting a bit of a good following. The stock is down today around 60-cents. Cramer recently gave AA a thumbs down in a lightening round on the 11th of July, although previously had a segment praising the company before earnings on July 5th. The stock is down several points from the positive note from Cramer. So even though the stock is down from the recommended option price, this is of course a longer term strategy and has plenty of time to rebound. The stock can easily go up or down over a dollar on any given day.

September 11th Update - The stock has still not gained $1 from $30.79 and is currently trading well below that with the option trading at $2.75. Likely a losing trade here.