Security In Focus: Manpower ($MAN)
We viewed $MAN has having downside risk, which subsequent to 1Q were momentarily allayed. We played this fine - as our Sell to Open 90 Call makes us revisit the thesis as an owner at $90. This was an uncovered call. As such we bought 2x position (1/2 full position) at $90, and are now in the money on 1/2 the position (1/4 total), having delivered the other 1/4 to meet the call (called away). We'll continue to monitor the security and business fundamentals here, as we are not quite convinced our prior thesis was incorrect, or that the security has gotten ahead of itself in the gap up, blow through all resistance post earnings movements this past week. At the same time valuation metrics are appealing and we see $90 as a floor for the intermediate term. This situation also underscores an expert trader's need to actively monitor uncovered calls to purchase and deliver the security at the strike ($90 in this case) or if covered, to be okay letting the stock breathe away from you at such price.