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Net Bank (NTBK) This stock failed to break above the red signal line. The net profit is at a loss. So we make lemonade out of these lemons. You should be able to write a Jan $5 put for 15-25 cents per and the Jan $10 calls for 10-15 cents to minimize the losses of the chicken straddle. This should bring in premium income of $200-$400 reducing the cost of the straddle. Target price to the upside is at the red signal line at $8.24 and low price below the yellow signal line at $7.36 could lead to a sell off down to $6.00. Over the next 2 days monitor the possibility of writing the spreads for maximum premium. Once you have written both spreads, puts and calls, time will tell if the stock will move out of the trading range.
Jan 2, 2006 NetBank (NTBK): Buy long 15 Jan $7.5 call and Buy long 15 Jan $7.5 puts total cost $1875. Netbank stock is in a niche market any merger announcements over the next few weeks concerning financial bank will cause this stock to break out above the $8.20 descending red signal line. If this happens, you will be extremely profitable with the calls. These option are expiring this month, so if the stock move higher close out the calls on the opening prices, within 5-9 minus of opening bell. Conversely, if there is bad news on the banking sector, look for this stock to break lower below $6.30 to break even.
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