PeakTrader.com

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Mon: Top Buys KBH DOW Top Sells SPY IWM

Primary Trades:

Calls: KBH reports earnings Thu and closed at 44 3/4. KBH Jun Max Pain is 50 and the Jun 45 calls closed at 1.10. KBH may rise into earnings and the Jun 45 calls implied volatility may stay high before earnings. Consequently, the Jun 45 calls may double before Thu. DOW remains fundamentally undervalued currently at 38 1/4. The Sep 40 calls closed at 1.30, which may be bought on pullbacks.

Puts: SPY closed above 125 1/4 and the Jul 128 puts closed at 4, which can be bought at 3.70 or 3.60, if SPY rises to about 126. IWM closed at 69 1/2 and it's more volatile than SPY. The Jul 72 puts, which closed at 3.70, may be bought above 70 1/2, at 3.20 or less.

Secondary Trades:

None

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Primary Trade: An intermediate or long term trade. Timing can be off substantially. Volatility not a factor. Risk is low to moderate. Potential return is often moderate.

Secondary Trade: A short term trade. Timing must be accurate or volatility must be high. Risk is high. Potential return is high.

Secondary Trades should be generally avoided, although considered. Note: If Secondary Trades are taken, they may affect Primary Trades.