As a result, I am recommending that those of you holding our recommended ACH call options sell them now. We will be selling at a loss, but our aim is to limit the losses as much as possible. The stock would have to advance close to $37 — up roughly 9% from the current price — in the next 10 days for us to make money on this play. That, I think, is unlikely.
The options also have traded today in sufficient quantity so that you should have little problem with liquidity.
If you own the stock, hold on to your shares for now, and keep your stop at $29.50.
I want to emphasize that you should make sure you close out the position — even at a loss — by next Friday, June 8, at the latest. Otherwise, you will run into liquidity problems and will be unable to sell the options before they will expire worthless.
Our Global Stock Investor portfolio consolidated over the last week as we head into the traditionally quiet summer months. As I noted in last week's update, global markets also need to digest their strong gains of recent weeks. The biggest danger I see to global markets is contagion from a collapsing Chinese stock market. Efforts by Chinese authorities to cool the nation's stock market frenzy could begin to have a ripple effect in other markets.
Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager. As well as a book author and regular contributor to numerous investment websites, Jim is the editor of:
Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.
Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services: