ACTIONS:

Use a limit order to buy to open the MSFT March 52.50 calls (MSFT160318C00052500, $1.07, up $0.16) up to $1.20. If the call options open above $1.20, cancel the trade.

Sell to close the remaining GRMN February 30 puts (GRMN169219P00030000, $0.24, down $0.15) at current levels.

 

Dear Momentum Options Subscriber,

I have a New Trade in Microsoft (MSFT) that I would like to get us into on this morning’s open. I also have a Trade Alert on Garmin (GRMN).

 

Microsoft (MSFT, $51.09, up $0.59)

Use a limit order to buy to open the MSFT March 52.50 calls (MSFT160318C00052500, $1.07, up $0.16) up to $1.20. 

Action: Use a Limit Order up to $1.20 to get the best fills on this morning’s open. If the call options open above $1.20, cancel the trade.

These options were heavily traded yesterday and open interest is approaching 80,000 contracts. This shows bullish traders are expecting a possible run past $52.50 by mid-March. These are the regular monthly options that expire on March 18, 2016.

I will provide the parameters of the trade in today’s Mid-Market Update.

 

Garmin (GRMN, $35.23, up $0.87)

Sell to close the remaining GRMN February 30 puts (GRMN169219P00030000, $0.24, down $0.15) at current levels.

Entry Price: $0.98 (1/20/2016)
Exit Target: $0.70 (closed half at $0.22 on 2/16/16)
Return: -75%
Stop Target: None

Action: Close the other half of the trade on this morning’s open to save any remaining premium.

Shares are trading higher in pre-market action after the company topped earnings and revenue expectations. Although Garmin lowered 2016 guidance, these options will take a hit today. At last check, the stock was north of $37.

 

All prices given in this update are current as of 9:05 a.m. EST.

I hereby disclose that I will be participating in the aforementioned trade(s). Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options