Chicago Merc (CME) soars on Q2 earnings

Brent Archer — Tue, 22 Jul 2008 15:09:00 EST

Filed under: Major Movement, Earnings Reports, Good news, Chicago Merc Exch Hld'A' (CME), Options, Technical Analysis

Chicago Mercatile Exchange (NYSE: CME) shares are soaring higher today after the company reported a second-quarter profit of $201 million, or $3.67 per share. Excluding one-time costs, CME earned $3.93 per share, beating analysts' estimates of $3.85 per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CME.

After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $282.00 last week. CME opened this morning at $328.99. So far today the stock has hit a low of $326.67 and a high of $349.80. As of 12:50, CME is trading at $344.28, up $18.75 (5.8%). The chart for CME looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $280 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just four weeks as long as CME is above $280 at August expiration. CME would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade here.

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Chicago Merc (CME) soars on Q2 earnings originally appeared on BloggingStocks on Tue, 22 Jul 2008 15:09:00 EST. Please see our terms for use of feeds.

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Chicago Mercantile Exchange (CME) falls on NYX earnings

Brent Archer — Tue, 06 May 2008 15:34:00 EST

Filed under: Earnings Reports, Bad News, Industry, Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX), Options, Technical Analysis

CME Group (NYSE: CME) shares are falling after competitor NYSE Euronext (NYSE: NYX) reported a first-quarter profit above analysts' estimates. CME's earnings that disappointed investors two weeks ago look even worse in light of NYX's good results this morning. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CME.

After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $399.01 in March. This morning, CME opened at $487.00. So far today the stock has hit a low of $476.27 and a high of $487.65. As of 12:40, CME is trading at $481.03, down $8.32 (-1.7%). The chart for CME looks neutral but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $550 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in six and a half weeks as long as CME is below $550 at June expiration. CME would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.

Continue reading Chicago Mercantile Exchange (CME) falls on NYX earnings

Chicago Mercantile Exchange (CME) falls on NYX earnings originally appeared on BloggingStocks on Tue, 06 May 2008 15:34:00 EST. Please see our terms for use of feeds.

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