This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

MAT: Let's Play With Mattel!

Ahead of the final run into the holidays, many stores are planning to be open for days straight in an effort to sell more electronics, clothes and certainly toys. The push to get as many shoppers through the holiday is building a large amount of anticipation of really nice holiday sales. This may or may not happen, but the market is rallying like it will. If this is true one of the real winners will be the world's largest toy maker Mattel (MAT). With consumer spending on the rise and the last-minute push, MAT will be able to not only sell Barbie dolls, but also the Barbie dream house and accessories. All great high margin stuff.

Let's review the T3/OP video with Jill and Scott for the fundamental and technical trade before getting into the options strategy:

Looking at the options, much to my surprise, MAT hit its lowest implied volatility level in over a year yesterday. This makes us want to be a buyer. Looking at the stock, it has been on a slow oscillating rally and has just bounced off of support. I think the stock testing $30 is entirely possible. With IV this low we can buy the 28 calls, the ATM's for about $0.65. From a cost and volatility perspective and the risk/reward profile, I think these calls are a steal if our premise that MAT is going up is correct. MAT options simply do not sit at 20% volatility for very long.

For those less sure the IV is so cheap a straddle would even be likely to win. That said, I lean bullish on the stock and like buying the January calls.

Trade: With MAT trading $27.99, buy to open MAT January 28 calls for $0.65.

This content brought to you by TheStreet's OptionsProfits. CLICK HERE FOR A 14-DAY FREE TRIAL.

OptionsProfits can be followed on Twitter at

Mark can be followed on Twitter at

T3Live can be followed on Twitter at

At the time of publication, Mark Sebastian, Jill Malandrino and Scott Redler held no positions in the stocks or issues mentioned.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MAT $31.09 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports