Tyson Foods is rated 5-stars by S&P (reiterated strong buy) and a buy by Ford Equity and Jaywalk, The Street and Credit Suise both have hold ratings... All ratings are within the past week. TSN is currently trading 16.35 and is 6% shorted. They pay a dividend of .04 on 29 November, are 85% held by institutions and have traded down to 11 and up to 20 in the past 52-weeks. It is currently at its 50-day moving average and well above its 200-day. All indicators are showing positive movements for this stock... So what's the trade. Since we are very bullish on TSN we could just sell PUTS and accept the potential risk, buy some April 17 calls with 140-days to expiration or buy the stock outright and cover on the way-up. I think this is a simple one and buying the 17-calls for 1.05-1.10 is solid with minimal risk. The premium isn't that high and volitility is around 33%. This means there probably won't be quick doubles but given the time we could see a double based on the underlying rising above 18 by April and then close the calls. Depending on world events it may be worth putting a limit to buy the calls around .90 - 1.00 and catching any fall in the market over the next week.
Happy Trading...
No comments:
Post a Comment