DryShips Seeing Some Action

1:00pm (EST) After a strong start, the market has slipped as all three major indexes are slightly down. The losses are minimal so maybe the bulls are resting for another afternoon rally. Not much is happening with our positions and remember Chipotle Mexican Grill (CMG, $87.78, down $0.52) is reporting on Wednesday after the bell. The stock has popped over $90 and I profiled the August 90 calls (CMGHS, $2.00, down $0.35) yesterday afternoon. I said I like positions up to $2.50 when they were at $2.35 but I also said to use limit prices to see if you could get in at lower entries. The calls have hit a high of $2.50 after the stock passed $90 but have now retreated. It’s now or never for those of you who like the thrill of an earnings play… Another story I’m watching closely is DryShips (DRYS, $6.07, up $0.02) which is seeing some unusual options activity. The stock has been a frequent visitor here in the blog and is capable of explosive moves up or down. In fact, over the past couple of months we have seen moves from $6 to $11+ and $6 to $9. If you’ll look at a chart, you’ll see some interesting action developing. There seems to be a lot of buyers of the August 7 calls (OOCHJ, $0.25, up $0.03) as nearly 9,000 contracts have traded thus far. Further out, there seems to be interest building in the September 7.50 calls (OOCIU, $0.35, 0.01) as 850 contracts have traded. The company reports earnings next Friday and it is one of those plays that is an all-or-nothing gig. If the stock is setting up for another run at $8 or $10 then these call options will do well. We have numerous positions open so be careful with these. They are cheap out-of-the money plays and if you enter the icy waters, use LIMIT orders and split the Bid and Ask prices. Rick@MomentumOptionsTrading.com]]>

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