12:30pm (EST) Fairchild Semiconductor (FCS, $8.83, up $0.26) is one of the best performers in the chip sector today as it is enjoying a 3% pop. The August 10 calls (FCSHB, $0.25, up $0.05) were profiled last Thursday at 17 cents. These is a very cheap out-of-the-money call option on a stock I feel has a shot at $10+ over the next month. However, there is still a huge difference in the Bid and Ask. I want to explain this to our new readers and it is a tip that will pay for itself over and over again. The current Bid is 15 cents meaning if you were to sell this option right now at the market you would get filled at 15 cents. The Ask is 25 cents so if you went to buy this option it would cost you $25 per contract. Here is where you would use “limit orders” to enter the position. You could buy or sell this option with a limit price of 20 cents. If you get a buyer or seller, fine, you went out and got in or out on YOUR terms. Remember this everytime you place a trade. Sometimes if a position is up HUGE, then yeah, you could do a market order to get out but otherwise ALWAYS stick to using LIMIT ORDERS. The Bid and Ask could narrow if Fairchild keeps moving but I wanted to make sure I got this point across. USEC (USU, $6.26, down $0.19) is slightly lower today but I’m expecting a pop in the August 7.50 calls (USUHU, $0.45, down $0.10) which were profiled at 52 cents last Thursday. This is a HIGHLY speculative play just like Fairchild and is based on an event happening. I’m hoping for a rally BEFORE the event with USEC. That should cover all of the OPEN trades. What I’m looking at RIGHT now: Chipotle Mexican Grill (CMG, $88.50, up $3.45) started off higher but has picked up steam over the past 90 minutes. Wow. The August 95 calls (CMGHS, $2.30, up $0.95) opened at $1.80 and they may be a good buy up to $2.50. They could also fall back a little so you could set LIMIT ORDERS at $2.00-$2.15. The company announces earnings on Wednesday and we have traded this one in the past. I’d like to be out BEFORE earnings but Chipotle can get some good love from Wall Street at times. Be careful with them and we will see where we are Tuesday afternoon… Rick@MomentumOptionsTrading.com ]]>