Thursday, January 11, 2007

NYMEX HOLDINGS (NMX)

Since I'm still waiting for NYX to pullback a little bit more for a long call entry, I thought that I might add another exchange play.

That's right, the New York Mercantile Holdings, Inc. (NYSE: NMX). Why another exchange you say?

Just because I think it has been neglected and forgotten about by investors who have been involved in NYX, CME, ICE and BOT.

Just because the stock has been beaten down since it's IPO and just because analysts have downgraded I think its time to rise will be imminent.

So here's what I have done to show my bullish bias on NMX. I bought the JUN 07 120 Calls for $13.41/contract near the close yesterday.

There is no theoretical option pricing model on any of these options because they have no history due to recent availability of options on the IPO.

The JUN 120 Call IV level is around 30% which is 52 wk lows. The ATM option IV has recently started rising which can be good for the call options especially if the underlying continues to rise.

Having said that, I like the recent support at 115 and 118 and have seen a recent runup the last two trading days. The trick will be if it can break the 133 level.

The only fundamentals that have been at the forefront of this company's earning growth potential is that its trading volume of both futures and options contracts have recently hit records especially those contracts tied to oil and precious metals.

I intend on grabbing more contracts as it breaks out of recent highs or if it retreats back to support levels, nothing in between.

Grab a vine and tell me what you think about this NMX long term call play.

2 comments:

Cal said...

I made the same trade, up 80% already
http://caltrader.blogspot.com/2007/01/nymex-holdings.html

Terence said...

That's what good traders are supposed to do. I actually saw your post about that entry when I was getting ready to get long. I missed the initial rebound from close to the 117 level. I was hoping for a 115 consolidation but never got it. Thanks for grabbing a vine.