July 24th 2006 - TXN

Dykstra picked the October 20 Call for Texas Instruments Inc.
Read the column here.

Option price: $7.30
Stock closing price on Friday July 21st: $27.00
Approximate premium: 30-cents ($27.00 - (Strike $20.00 + $7.30) = $0.30)

TXN reported after hours today and the stock was up 3% after hours. The option did have volume today at the $7.30 price range, so it is a good bet that Dykstra got his purchase in on time since he said he placed the order this morning. The option value closed the end of the day already up $1.00 at $8.30 as the stock rose in regular trading over $1 intra-day. So assuming Dykstra sold his option before the earnings announcement he would have had a quick days work. Otherwise, it looks like he will have no problem cashing in tomorrow (since you can't trade the options after hours). So, with an up market, the sector being strong, and possibly a pre-earnings runup made this a quick trade.