Blue Nile Trading Options

I’ve been thinking about Blue Nile (NASD:NILE) lately… after the recent earnings report, shares were down from $40 to around $36 now. I don’t see any near term catalyst for the stock to go up and beyond $40 anytime before the next earnings announcement in say late Jan or early Feb 2007.

As such, my guess is that the stock price should trade in the range between $32 to $37 until then. A quick look at the option price reveals that I can enter a JAN 30/35 bull put spread for $2 credit. Looks like a pretty safe bet to me.

To all Blue Nile fans out there: any better way to play this stock?


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