Call Options on FRAN on 9/4/2012

Customers of Francesca's Holdings are left holding the bag - one full of trendy wares. The company sells apparel and accessories to 18- to 35-year old women at some 280 Francesca's Collections shops in 41 states. It opens more than 70 new stores a year, yet promotes an independent, upscale boutique image by allowing store managers to personalize shops. Francesca's Collections also deliberately carries limited quantities of certain items to create a "treasure hunt" ambiance. It relies on a mix of half apparel and half jewelry and accessories along with rapid product turnover to encourage customers to return often. Formed in 1999, the company entered the stock market in 2011.

Stockwinners is bullish on this name for the following reason: 

1. We are now hearing rumors that this stock is going to be featured by one of the biggest advisory firm in the country. 

Note: This is an expensive option and the goal here is to make this a spread later on and sell an upper leg once the stock goes higher. 

Trade: Buy 1 OCT $35 Call for less than $3.85

Breakeven & Profit/Loss analysis:

• Breakeven at $38.85 by Oct expiration 
• Profits are unlimited above $38.85 
• Losses up to $3.85 between $38.85 and $35, max loss $3.85 below $35 by october expiration 

The payoff is presented below: 

Trade Buy 1 October $35.00 Call at $3.85 For a net debit of $3.85 Profit/Loss Analysis Breakeven at $38.85 Maximum profit is unbounded Maximum loss is ($385.00) at strike of $35.00 Closing Summary Sold 1 October $35.00 Call at $0.00

Position closed on 10/21/2012 at price of $0.00 with a -100.00% loss in 46 days.

Updates

10/21/2012 11:49:14 AM

Calls expired worthless and we were on the wrong side of this trade.

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