Cramer Says to Watch Out For Stocks Just Above Their Strike Price

Cramer on his daily on TheStreet.com discussed strike price expiration coming this Friday in a feature called STRIKE PRICE STRIKEOUT.  This pertains to the theory (and common effect) that stocks tend to gravitate toward their closest option strike prices as options expiration date nears.

Options can impact AIG (AIG) trapping it at $70, Cisco (CSCO) at $27.5, Exxon Mobil (XOM) at $75, and General Electric (GE) trapped by $35 strike prices.

Cramer believes Chevron (CVX) could go up to $75 based on it gravitating toward its closest option strike prices.  He would avoid stocks that are $1 or $2 above the strikes, but likes stocks that are above $3.00 from their closest strike prices.

In financials Cramer showed he isn’t just always a Brokerage Stock Bull as he said Goldman Sachs (GS) is ahead of itself like Lehman (LEH) and Bear Stearns (BSC).  On Sears Holdings (SHLD) Cramer said the stock is up today is the same report that Deutsche Bank issued the day after Thanksgiving when no one was there and he had previously said the firm should re-issue the report.

Cramer ended with "Citigroup (C) unless the top guys leave, this stock is going down a dollar and a half."

Jon C. Ogg
December 11, 2006