Are people finally starting to wake up to how under-valued the big three Potash names are?

I’m writing this at 1:30pm on Oct 29th. The markets, to this point, have held there gains from the Oct 28th 10%+ S&P upswing session.

I think what we are seeing right now in the market is a mixture of buying and short covering. Although as I pointed out a few weeks back the short percentage on any of these stocks (agrium, mosiac, potash) is below 5%. So while many shorts are covering in other sectors of the market, the majority of the Potash buying is on the long side.

With the VIX hovering up and down on a daily basis straight calls are getting too expensive. How about bull call spreads?

If you are back to believing (which I’m not 100% behind) I’d advise looking into some of the stronger value call option spreads, but to be safe I’d move out to 2010 contracts for each of the big three.

In and near the money spreads, lets use MOS January 2010 30-40 bull call, can be had for $4. If MOS closes in Jan 2010 above $40 per share then the position will yield a 150% profit before commission. Just some food for thought.

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