Monsanto Options Look Too Good to Ignore

Monsanto (MON - commentary - Cramer's Take) January 65 calls. Mouthwatering to me. The company reports tomorrow and then goes on a road show next week. They will be talking about their pipeline, and they will be bullish as all get-out. These ag stocks have been slaughtered, and I want to find a way to play the darned thing ahead of the quarter, and I stumble on this contract.

It seems just right for me.

Let me tell you how I would play this from the old hedge fund days. Obviously the stock is getting killed here, hence the opportunity.

I would pick up the calls here. If you get a lift in the common, you sell some common against it, maybe on a 1-to-2 common-to-call ratio in case the bears on the stock are right.

You have a terrific catalyst right in front of you. You have a jazzed management team that has had a stock just destroyed right underneath them.

And, perhaps most important, you have Frank Mitsch, the excellent BB&T chemical analyst, saying the level is right. The calls enable you to low-risk the darned thing because of the nearness of expiration.

I think it is worth the plunge.

Random musings: Reading over the Fortress Investement (FIG - commentary - Cramer's Take) piece on the flagship site, I recall that it was ridiculous when the SEC approved this company to go public. What kind of transparency can a hedge fund really offer? Obviously this was one of the worst deals of all time. Can I just say that I hope the next SEC will actually say no now and then to a company that should not be listed? Or is that too much to ask?

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Know What You Own: Other stocks in the agriculture sector include Potash (POT - commentary - Cramer's Take), Deere (DE - commentary - Cramer's Take), Caterpillar (CAT - commentary - Cramer's Take), Mosaic (MOS - commentary - Cramer's Take) and Agrium (AGU - commentary - Cramer's Take).

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