Investment Capitalist

FC Stone Group (FCSX) is up huge on blowout earnings. I indicated in the April 2 post that the fundamentals here are absolutely incredible, the volatility in the markets is the equivalent of a major gold rush, and they are shielded from the mortgage market because none of their trading partners are exposed to anything but the commodity sector, primarily as producers and hedgers. Their numbers today not only further confirmed this perspective, management really showed investors how much talent is at the top of this company.

From the April 2 level, FC Stone is up approximately 33%. There is much more upside but the only short-term issue is the gap underneath. I wouldn’t normally recommended holding on a gap of this size but with this particular stock, rather than trading out, I would prefer suggesting setting up a collar around the position to protect some of these gains. If your desk allows it, either buy some puts or sell some calls or both, but probably against a small percentage of the position. 

Disclosures: None