One of the best way’s to make money trading options, is buying when a stock is cold…when noone is paying attention. Stocks with high beta(volatility), have higher option premiums. Stocks under the radar with low beta, have cheaper options.
CME is one of those stocks. We wrote about her January 12th, in which the options we mentioned, were a 500% gain a week later.
CME reports earnings February 2nd before the bell, and we think CME will get some legs leading up to the report, as well as after.
CME is a market leading clearing house, and the stock used to trade over $700. Lower exchange volumes and the 2008 downturn, has had a big impact on the stock price. Couple that with the MF global fiasco, and you have an oversold stock. It finally looks like CME is ready to turn back to the upside and head over $300.
Right now we are positioning ourselves with the $270 and $280 FEB 18th Calls currently at .65 and .30 respectively.
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