In my opinion, as you know, the market was oversold too fast. Although I still believe the general macroeconomic environment is still shaky, I believe the risk has now (albeit temporarily) shifted to the upside. Those of you that are short the market, be careful as this relief rally could last for a few days.
Given this, my trade for the day is (drumroll please)....
None other than PAR!
There are new reports that Dell is not ready to bow out of the race just yet. If Dell decides to Match HP's $30/share offer, I believe that HP will come back and bid $32.5 or possibly even $35. So whats the trade?
1 - Go long the stock OR
2- Jump right into the options :)
I would purchase what we refer to as a call-spread. I would buy the $35 option and sell the $37.5 which creates a spread. You net price to purchase the option is just $0.25! Not a bad bet if the bidding hoopla continues for a few more days. If not, what the heck, it's $0.25!!
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