Buy Encore Wiring WIRE

Trade

Buy/write on WIRE Encore Wiring (profile)
buy the stock, sell the May 40 call

I am selling the in-the-money call, making this a relatively conservative trade with small upside and higher odds of success. The catalyst is a blowout earnings report. I am not all in because a slow down in housing means less new wiring and the stock has had an amazing run from 8 to over 40. So far, any slowdown in housing has not impacted this company. The market capitalization is $900 million which is another reason to be a bit cautious.

Elsewhere, BUD Budweiser reports earnings and trades up. Beer is a mature market, and BUD has 50% share. If the option premiums were higher I'd be tempted.

BA Boeing reported nice earnings, opened lower then rallied. I sold my BA too soon, seven points lower.

Current positions:
WIRE Encore Wiring hedged
NX Quanex (steel) hedged
BAB British Air hedged
PGR Progressive (insurance)
* hedged means I own the stock and am short the call