MOT Calls

Discussion in 'Options' started by macrotrader, May 30, 2010.

  1. Hi,

    I am new to options, not to the market though. I am looking at MOT October calls, which look pretty cheap to me. The 7 Calls go for 38%, the 8 for 34%. Given the last earnings surprise in Q1 and heavy revisions for the year I think there is good chance that the October 8 Call will expire ITM. In any case I believe volatility will be a quite a bit higher than the last weeks. However it will probably take a couple of weeks until MOT gains momentum, hovering slightly about it's 3 month lows, having lost not much less than the S&P.

    To summarize my outlook is:

    Nearterm (3-4 weeks)
    Price Flat to slightly upwards
    Volatility Flat to Upwards

    Longterm (October)
    Price Upwards
    Volatility Upwards

    Given that view should I buy some July OTM puts to hedge some delta and add some vega?