MGM: FYI I'm in this for June $6 call -- which miight be stupid as it cost 1/2 the stock cost MGM is at $9.61, Jan 10s are going for $0.50. my guess is one can make 5% for the forseeable future on this one. and if the guess is right, come summer it might be a reasonable gainer. Another way to play this is buy the jan12 $7.50 for $4.80 and write the calls against that. here is a bit of background. don't worry, I paid for this, didn't generate it MGM MIRAGE (MGM) TRADE DRIVERS: * MGM owns and operates casino resorts in the United States. * Since tagging an annual low in March 2009, MGM has gained more than 434 percent. * The equity pulled back today near the 9.50 level, which acted as support earlier this month and in October 2009. * There is heavy put open interest for MGM at the January 9 strike. An unwinding of the short positions related to this open interest could provide a tailwind for the equity. * Short interest for MGM is high, with more than 12 percent of the stock's float sold short. A continued increase in the shares' price could lead to a short-covering rally. * Upgrades are a possibility for MGM, as only 4 of the 19 analysts covering the stock rate it a "buy." * One potential concern is that the stock is currently trading below its 50-day and 80-day trendlines, which may act as resistance. |
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