March 7, 2013
Charles Schwab (SCHW)
ACTIONS: Buy the SCHW September 18 Calls for $1.05 or less
Dear Fellow Big Money Options Traders,
Yesterday, institutional options investors bought over 10,000 Apr 18 calls in Charles Schwab (SCHW). Today, they are buying March 18 calls. The brokerage industry is showing tremendous relative strength. Schwab is trading at a 52 week high. On February 14, Schwab reported total client assets were a record $2.01 trillion as of month-end January, up 16% year-over-year. On March 4, Bernstein upgraded the stock from Market Perform to Outperform.
While SCHW has jumped off of its lows, it still has a long way to run before regaining ground lost since early 2011. Like TD Ameritrade, Schwab’s earnings will jump significantly higher in the event interest rates begin to rise. Additionally, earnings will have an upward bias as client accounts continue to grow as a result of stock market appreciation. We recommend participating in these bullish trends by buying the SCHW Sep 18 Calls for $1.05 or less.
Have a good week trading.
Nick Atkeson and Andrew Houghton
Big Money Options