If you know how options are valued, you know that their value explodes after such big “up” days. Indeed, your options were up 90% (!) in just yesterday’s trading.
Although the options are up “only” a modest 26.67% overall, I am recommending that you sell all of your March $20 call options here to lock in your gains.
Here’s why. You’ve held these options quite a while now, and their value is set to decline rapidly as they approach the March expiration deadline. I expect to recommend some cheaper and longer-lasting options in CCME when the stock settles — or even pulls back a little.
But hold onto CCME stock for now. As you know, this is my no. 1 pick for 2011 — and one that I hold both personally and for my clients at Global Guru Capital — and I believe you’ll be making some more big profits on this one.
Spreadtrum Communications Inc. (SPRD) also jumped 4.1% yesterday. This sent the May $17.50 calls soaring. With the stock up 21.03% and the options up 71.43%, I am recommending that you sell half of your options here to lock in your gains. But hold onto both the stock and the options for potentially bigger future gains.
If you are a new subscriber to Global Bull Market Alert — and I know that there are close to 50 of you after Tuesday’s special teleconference — I want to remind you to make sure to watch this introductory video on my option trading philosophy to help you maximize your gains.