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Wednesday's "Earnings Beat" Makes This The Perfect "Bad-Market" Tech Stock

In last week’s Private Briefing report Our Experts Show You the Stocks to Pick in a ‘Stock-Picker’s Market’,” Money Map Press Chief Investment Strategist Keith Fitz-Gerald identified SanDisk Corp.(NasdaqGS: SNDK) as one of three stocks to buy in the face of the stock market sell-off.

And now we see why…

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    Options 101: How to Win Big on Toll Brothers (NYSE: TOL) with a Calendar Spread

    Last week, I explained how to profit from housing-sector stocks like Home Depot Inc. (NYSE: HD) using a modified option straddle.

    Today, we'll look at an alternative options strategy - known as a long-term calendar spread.

    This strategy is better suited to stable or trending stocks.

    It's particularly appropriate for companies, whose share prices aren't likely to make a major move until the housing recovery picks up more steam.

    In this case, I'm talking about a company like the Toll Brothers Inc. (NYSE: TOL).

    The key for using a calendar spread strategy on Toll Brothers is the prospect of a slow-appreciation scenario. That's likely, given the news in the housing market isn't always so rosy.

    For example, MSNBC reported on Saturday that, in spite of the lowest rates ever and home prices that are down by a third since 2006, mortgages now are much harder to get.

    That type of news is the primary reason you probably don't want to buy a stock like Toll Brothers right -especially since it's already up 74% off the October lows.

    However, that doesn't mean you can't profit from Toll Brothers using options to create a long-term calendar spread.

    How to Structure a Toll Brothers Calendar Spread

    Here's how it might be structured, based on prices available early this week:

    To continue reading, please click here...

  • what is calendar spread