Monday, July 26, 2010

OnlyDoubles Profit Spotlight for the week of July 30th, 2010

Hello and welcome back to CRI's OnlyDoubles Profit Spotlight.

Here you will find past OnlyDoubles trades. This blog's purpose is to update the public on recently completed OnlyDoubles trades. If you would like to learn more or subscribe (for real time access to new OnlyDoubles trade ideas) please visit our Subscription page.

Sugar #11

Sugar prices have been trending higher (according to CRI's CTS) for 7 weeks now. When prices first broke CRI suggested one ought to pick up the October $.20 call options for $.0032 ($407US). As the chart to the left above shows, prices have moved dramatically higher over the past month. Indeed, price has moved up so much that our $.20 call option has doubled in value (.72 bid / .79 offered as of writing this AM).

While I do believe there is still more room for this market to move higher (and for the option to continue to move higher in price), the prudent action by all investors is to sell at least half of your position should it double in value. Today's blog entry then is a testament to this time tested principle.

If one sells at least half their position today (at .75 or better) then the absolute worst case scenario on this trade will be to see the remaining half of the position expire worthless (which we of course will endeavor to avoid). Should you decide to sell the whole position today then your profit on this 7 week trade should be just about 100%.....not bad at all!

Now what you do with the profits is up to you, but you might want to check out the latest edition of CRI's OnlyDoubles to find out where CRI sees the next potential double out there.

That's all for this issue of CRI's OnlyDoubles,
Brian Beamish FCSI

Thursday, July 8, 2010

CTS Spotlight for the week of July 8th, 2010

Hello and welcome to CRI's OnlyDoubles inaugural blog entry

As this is the first issue of CRI's OnlyDoubles blog, I will review a typical only doubles trade that was executed over the winter months. Long time readers of CRI will remember this trade from its inception to conclusion. Here then is a review of SSW (Seaspan) and how the trade went.

In the Winter of '09-'10 the world economy still had a head of steam. Prices where continuing their nine month surge on a belief that continued growth out of China would pull the world economy back from the brink. Regardless of weather or not one believes that the world economy is indeed on the mend, the market had gotten so technically oversold that a bounce (in this commentators opinion) was inevitable. Here for example, was a multi-national corporation with global operations and a relatively consistent earnings stream that saw its stock go from $25 to $3 in a matter of months.

Shrewd investors ought to have seen the opportunity (how do read OPPORTUNITYISNOWHERE?).

From a simple 50% rule perspective, the odds of this stock seeing a move into the low teens again seemed quite high. As our time tested bottom hunting trading system looks for higher highs and higher lows (the 'W' pattern), I waited until we got the breakout through $9.72 which came in early January, 2010. Since our simple goal is to find trades that will literally double in value, we looked to the options market for exposure to the stock. We could have bought the stock at $10 and looked for a 30% return with a sale at $13 but at the same time, a 6 month 'at-the-money' call option ($10 stike price) was trading at $1.10. If the stock did go to our target in that six month time frame (the life of the option) that option would have a value of $3.00. Now that's my kind of trading! At the time I was notified of my fill (bought Aug. '10 $10 calls at $1.15, I immediately placed an order to sell half the position at my target ($3.00).

Indeed, within 3 months of issuing an alert on SSW, the stock rallied more than 35%. At the same time, call option premiums exploded. While I fully expected a move to $13.00 (which would imply $3.00 of intrinsic value on the call option - and way more than a double) even I was shocked when the price spiked into the $14 area. Open orders to sell our position were indeed filled (one person got off at $3.60....lucky dog) but most were sold between $2.50 and $3.00. I then let the rest go at $2.50 for an average sale price of $2.75. Considering our cost was $1.15 the actual profit return was 139% or well over a double.

So there you go, our first blog entry for CRI's OnlyDoubles service. Should you have any questions, comments or concerns, please feel free to contact us at for a prompt reply.

That's all for this issue of CRI's OnlyDoubles,
Brian Beamish FCSI