Make Money Trading FRK Option After 2 Months

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Jan 24 2007
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After constipation for almost two months investing Florida Rock Industries, Inc. (NYSE: FRK), I finally found the strength to sell and make some monies in the stock. If you remember, I opened the position for this stock right before its’ earning announcement [ details here ] last quarter which was on Nov-29-2006. After the great quarter where it beats earning estimates when it registered 80 cents per-share against wall street consensus of 0.78, the stock gap-up (refer to chart) but it was only for a short-while. I was greedy and wanted to wait for another day to maximize my profit but it spells disaster when it fell to the price before the announcement and remained there for almost one month.

It could be due to the general perception that the housing industry was weak but I believe in its’ fundamental as the leader in cement sectors. If you’re staying in Florida, then you should know what company this giant really is. The stock started to rally just after the 2007 New Year and yesterday was a big one which could be due to its’ next earning announcement schedule on (…drum please) today, Wednesday Jan-24-2007 after market close.

With plenty of time-value prior to the option trading on Nov-29-2006, the waterfall drop seems to start kicking in with my Mar 2007 40.0 Call Option – hence, I closed my position yesterday, Tuesday Jan-23-2007. I need to lock-in my profit to realize the money before something bad happen. I might re-open new position today before it announce its’ earning after the market close today. We’ll see if it’s feasible to invest in this stock/option later.

# TIP: Due to water-fall drop when the option nears the expiry, always consider time-value before trading option – just in case.

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