FRO's Debut Today

I got an email today from American Stock Exchange that I wanted to pass along:

AMERICAN STOCK EXCHANGE ANNOUNCES LAUNCH OF FIXED RETURN OPTIONS (FROs) ON THURSDAY MAY 8, 2008

New York , May 1, 2008 – The American Stock Exchange® (Amex®) announced today the launch of Fixed Return OptionsSM (FROsSM), which will begin trading on May 8. FROs are “binary” options on popular equities and exchange traded funds (ETFs), including QQQQ, SPDRs and Google that will pay a fixed, cash amount of $100.00 upon settlement “in-the-money.”

Fixed Return Options are offered in two forms: “Finish High” – each long contract returns $100.00 if the underlying security settlement value is above the strike price at expiration and “Finish Low” – each long contract returns $100.00 if the underlying security settlement value is below the strike price at expiration.

FROs will settle at expiration based on Amex. FRO Settlement Index that will be published every 15 seconds over Tape B. Amex FRO Settlement Index is a weighted average of trading in the underlying on expiration day.

This is an interesting development and while some of you probably knew about this before, I guess I must have missed it. More and more though, the stock market is becoming a gambling machine, but I really do like this. Will be watching it more carefully.

Some stocks you can start trading FROs on are:

-- Faisal Laljee

Tiffany and Gamestop Stand to Benefit from the Rebate Checks

Summer is around the corner. Rebate checks are in the mail. So what are people going to buy with their checks? Walmart is cashing the checks for free. Sears is offerng a 10% match with a purchase of any gift card -- all this to lure enthusiastic shoppers who can't wait to spend their dollars.

But being that it is wedding season (which incidentally also means a season for wedding anniversaries), Tiffany (TIF) will be one of the beneficiaries of this double impact. Now the TIF stock has been having plenty of trouble of late. Technicians will tell you about the double top, followed by a reverse cup-with-handle. Sure, but the underlying reason is a slowing economy, higher food and gas prices, slowing consumer discretionary spending and yes, the rising price of silver. However, precious metals are retreating from their highs. And given the additional foot traffic that they will get over summer, I think this stock is worth a second look. While it is up 30% since January, the stock is a far cry from the $56 it had scaled back in October of 2007.

The second retailer that I think benefits from the summer spending and tax rebates is Gamestop (GME). The video gaming industry is in full swing with 3 new generation consoles still selling like hot cakes. The Wii is still an elusive acquisition, and PS3 is just starting to make inroads with serious gamers. GTA 4 has already amassed $500 million in its very first week of release. Wii Fit, Gears of War 2, new versions of Rock Band and Guitar Hero .. the list of new hit games to be released goes on. And with the price of gas higher than ever before, people will opt in for more evenings at home playing video games than going out. Who wants to spend the checks on gas when one could pick up GTA 4 or the new version of Guitar Hero.

Gamestop holds 25% of the video game market. In order to attract casual gamers, the stores have also been revamped. The company, which has been growing earnings annually at 30% for the last few years also plans to open 600 new stores in 2008 across the US and Europe. The stock 16% of its recent high and is a good buy around the $50-52 mark.

I believe the two stocks above both give you a nice way to play the season and tax rebates.

-- Faisal Laljee
Full Disclosure: I don't own either GME or TIF but my position can change anytime without notice.

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• Top 3 Retail Stocks to Own Now
• Top 10 US Stocks to Buy Now
• Nintendo's Wii Demand Better than Sony's PS3
• Buy Video Games this Holiday Season

Why Oil is Cheap ... Again

Back in July 2006, I set a price target of $125 on oil and I gave it two years. Back then, oi