July 31st 2006 - MXIM
Dykstra picked the November 22.50 Call for Maxim Integrated Products Inc.
Read the column here.
Option price: $7.20 to $7.50
Stock closing price on Friday July 21st: $29.31
Approximate premium: 69-cents ($29.31 - (Strike $22.50 + $7.50) = $0.69) *
* based on the higher end of the option premium Dykstra recommended
The option traded today at a volume of 282 between the price of $7.30 and $7.60, closing at $7.50 on a day where the stock closed up only 7-cents to $29.38. Assuming Dykstra wasn't waiting for the lowest end of his target buy price, he probably got filled at $7.30. From the column, this pick is based on the company reporting earnings this Friday. A strong earnings could give this a big pop and make for a short win. There could also be a pre-earnings run-up that boost the stock before earnings and of course selling for a profit before that point would probably be best in my opinion.
August 7th Update - As mentioned in Dykstra's column today, MXIM hit the $1000 price target on Friday as the option traded up to $8.30. Another quick one for Dykstra!
posted by CramerTracker @ 7/31/2006 04:19:00 p.m.
3 comments
3 Comments:
When Dykstra sends you a buying range, the option price is usually above his buying price. This leaves you to buy at higher price within the range, so I guess you should place your Sell price limit 1000. according to his buy price which leaves you with a lesser profit if you bought in at 7.60.
Very true. I assume Dykstra is probably buying his contracts the Friday before or the Monday before his article is posted. I don't think he causes any huge demand in the options as I don't normally see huge volume, although there is certainly some. When he picks options based on earnings that are coming up it can be hard to buy at his target range for sure since there may be some pre-earnings runup. In the end though, as long as the picks go up in value, a profit is a profit :)
Nice going
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