Mosaic and Potash of Saskatechewan Calls

    One of the best trades I have made in the past three weeks has been long-term Calls in two fertilizer producers and distributors, Mosaic (MOS) and Potash (POT). I currently own September 2008 Calls with strike prices of 135 and 230 respectively.

    The Mosaic Calls I picked up for $15 a piece and they have rallied along with the stock for an 81.33% gain since April 7^th. The Potash Calls I picked up for $19 a piece on April 18^th and have watched them rally to $27.20 today for a 41.05% gain.

    With the IPO of Intrepid Potash today, I suspect Potash will rally again tomorrow. The company’s earnings are also scheduled for the 24^th. I want to close out this position prior to the earnings as earnings are never a certain thing. If the earnings come in above expectations and the company does not warn in future quarters, I will reestablish a similar position again.

    I want to let the Mosaic Calls run through the fertilizer company earnings this week as the company has already announced their quarter on the 4^th. If the return on the Calls reaches 100%, I will close out the position and purchase a similar position at half the value and look for other areas to invest the remaining proceeds.