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Options Action: Archer Daniels Midland

Monday, 4 Oct 2010 | 5:54 PM ET
Options Action
Profiting from ADM, with Mike Khouw, Cantor Fitzgerald.

With grain prices surging last month but now pulling back, should you dump shares of ADM?

Don't make a move until you hear from Mike Khouw!

If you're already long ADM rather than sell, Khow suggests a put spread against that long position.

His trade follows:

ADM put spread against long position
Buy JAN 31 Puts @ $1.90
Sell JAN 26 Puts @ $0.50

***How Mike’s ADM Trade Makes Money***
Profits Above $33.40
Protected $29.60-$26
Losses Below $26

Learn more about this trade. Watch the video now!


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Trader disclosure: On Oct. 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (GS), (INTC), (MSFT), (C), (NUE), (BTU); Adami's Wife Works At Merck ; Karabell Owns (AAPL), (FCX); Jon Najarian Is Selling (Aapl) Puts; Jon Najarian Is Long (Lvs); Jon Najarian Is Short (Lvs) Calls; Jon Najarian Is Long (Mgm); Jon Najarian Is Short (Mgm) Calls; Jon Najarian Is Short (Mos) Calls; Jon Najarian Is Short (Mos) Puts; Jon Najarian Is Long (Wynn); Jon Najarian Is Short (Wynn) Calls; Joe Terranova Is Long (EOG), (APA), (AAPL), (OIH), (VRTS), (XBI), (ARUN), (IBM), (XBI), (C), (ORCL), (PEP), (OXY), (SU), (JOYG), (RIG), (IBM), (HES), (RSH), (UPL); Stephen Weiss Owns (NIHD); Stephen Weiss Owns (SLE

For Zach Karabell:
Karabell's Firm Is Long (WCN)
Karabell's Firm Is Long (MSFT)
Karabell's Firm Is Short (SPY)
Karabell's Firm Is Short (QQQQ)

For Mike Khouw
Cantor Fitzgerald Is A Market Maker In (ADM)

For Vance Edelson
Morgan Stanley Owns 1% Or More Of (EXBD), (URS)
Morgan Stanley Has Advised On A Public Offering Of (RSG), (WM)
Morgan Stanley Has Received Compensation For Inv. Banking services from (RSG), (RHI) (URS), (WM)
Morgan Stanley Makes A Market In Shares Of (RSG), (URS), (WM)

CNBC.com with wires.

  Price   Change %Change
ADM
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