4/7 Trades

I haven't traded any of the stocks from today's Top Prospects list.

However, I did go back and take a look at ERTS -- the gamer Electronic Arts Inc. -- from Wednesday's list. It has broken above the 55-day price channel three days in a row, and the upper boundary of the channel is rising. This -- today -- at a time when much of the market is pulling back.

I had initially not traded because the spreads gave a lousy risk/reward ratio. So for today's position, I've kept it simple, buying September calls with an $18 strike.

The characteristics of that option are a delta of 73 -- the option's value rises by 73¢ for each dollar the stock goes up. That's a 24% rise on the option for each 5% rise on the stock, giving 5:1 leverage. I do like that.

And the theta is zero -- virtually no discernable time decay -- because the option is so far out from expiration. If I hold it until September, it will be decaying quickly, but I don't intend to do that. This trade will go away prior to earnings after the close on May 10.