Dykstra: Budweiser's the King of Options

Today I would like to take a look at Anheuser-Busch(BUD Quote), a stock I last wrote about on July 20th. As the symbol will tell you, Anheuser-Busch is the brewer of the Budweiser line of beers, two of which, Budweiser and Bud Light, are the among the world's best sellers.

The company operates 12 breweries in the U.S. and abroad. If history tells us anything, it's that stocks like Anheuser-Busch perform particularly well during tumultuous times.

In the early part of this decade, the company's share price steadily increased in value, while the broader market indices slumped terribly. (There seems to be a correlation between a tumultuous macroeconomy and increased beer consumption.)

In July, Anheuser reported profits in line with expectations, and in September management declared that it expects stellar earnings growth for the second half of 2007. The company now expects to beat earnings for the remainder of the year.

Now is the right time to use deep-in-the-money options to trade Anheuser-Busch. The stock's share price is trading just above both its 21-day and 200-day moving average; these metrics should provide solid support for the company's stock and allow an excellent entry point for prudent traders.

Today, I will place a limit order at $7.50 to buy 10 contracts of the March 45 Budweiser (BUDCI) DITM calls.

Now, as I do every Friday, let's take a look at your emails.