I mentioned Wachovia (WB, $10.10, down $0.61) last Tuesday and some of the January call options we were looking at. We were on hold trying to get cheaper prices and we now have it. To start, this is an extremely risky trade especially in this type of market environment. The financials are going to be “whacky” and some of you may be wondering what the market is smoking but when there’s “blood in the streets” it can get scary.
The January 15 calls (WBAC, $1.40, down $0.60) were at $6.00 on September 9 and the January 20 calls (WBAD, $0.65, down $0.20) were at $3.00. We were looking to get into the January 20’s at $2.00 or better. Well, the market has taken Wachovia from almost $20 to right at $10 over the past week. Now might be just the right time to play a quick bounce from here.
I wouldn’t back the truck up here because we may be sitting on a land mine but I like both call options at these levels. It will either blow up or we will walk away with some huge profits.
Rick Rouse
Rick@OptionsMentoring.com