We are making another speculative trade (perhaps the last one for 2009) in Macys (NYSE: M). This is again a cheap speculative play thinking ahead of the holiday shopping season. We are buying the January 2010 $20 call options at a premium of $20 per contract. Yes, this one is really cheap but we also have very limited time for the stock to move. It’s current price is just a shade under $17. So, it will have to move around $3 very quickly for us to make any money on this trade. That is over 15% from its current price. So, it is a very speculative trade. But the amount of risk is low and we think the risk reward profile of this trade makes it quite a compelling trade to make. Let us see how compelling the gains turn out to be.
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Sphere: Related ContentTags: call options, macys, Options, premium, retail, speculation, trade, trading
