Wednesday, October 10, 2007

New Recommendation: Bunge April 2008 Call Options

Today we're going to take a flyer on what is essentially a covered call play... by adding the Bunge April 2008 $125.00 call (BGDE.X) options to the portfolio.

We've seen strong action in Bunge (BG) for months on end, and are now up more than 50% on this position.

Continued higher grain prices, the demand for ethanol and corn, and Bunge's positioning as a supplier of foodstuffs to the exploding consumer populations in China and India are all helping push the stock higher.

Commodities in general could continue strong over the next six months (crystal ball warning!) because of the continued volatility and uneasiness in the equity markets (which can drive people into real assets like commodities)... and also the continuing bull cycle for commodities in general, which should run for another few years more at least based on past 16-year bull cycles in the sector.

This is a pure speculation on BG continuing its upward march. And we have a few months to be right... or wrong.

Action: Add the Bunge April 2008 $125.00 call (BGDE.X) options to the portfolio at $3.90.

Good trading,

James

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