We were stopped out of the Johnson & Johnson (JNJ, $68.08, down $0.40) August 65 calls (JNJHM, $3.20, down $0.30) at $3.80 on Tuesday. J&J has failed to rally with the market but the calls were profiled at $2.30 so our return was 65%.
Biogen Idec (BIIB, $71.27, up $0.77) has traded higher the past two days and has pushed through $70. The August 70 calls (IHDHN, $2.85, up $0.45) are now in-the-money by $1.27 and they were profiled at $2.30. As you can see, there is some time premium still built into the calls but let’s go ahead and set stops at $2.50 which gives us about a 10% gain should the stock stall.
Qualcomm (QCOM, $55.64, up $0.72) set a new 52-week high on Wednesday. After starting the week lower, Qualcomm has also put in a solid two days. The October 50 calls (AAOJJ, $7.15, up $0.35) are now up a whopping 250% from an entry price of $2.05 well in-the-money. Let’s set stops at $6.15 which guarantees a 200% profit.