9:00 am (EST)
I had a busy day on Monday with everything going on but I wanted to update some of the positions we have open and what is happening with them.
The Celgene (CELG, $42.31, up $0.16) April 40 calls (LGHDH, $3.00, up $0.25) had a stop of $2.25-$2.50 and the calls traded as low as $2.30. These options were profiled at 80 cents and we closed half of the position on Friday at $2.80. If you had a “loose” stop and are still in the other half of the trade, then set a firm stop at $2.70. Half of the May 40 calls (LGHEH, $4.40, up $0.20) were closed at $4.20 and stops were set at $3.50. Raise them to $3.90.
Las Vegas Sands (LVS, $4.96, up $0.48) came out of the opening bell like a bat out of hell as the stock zoomed to a high of $5.21 shortly after 10am yesterday. We ended off the highs of the day but the April 5 calls (LJJDA, $0.48, up $0.18) closed for a nearly a double from our entry price of 25 cents. I had a target of 50 cents on them and they actually opened at 25 cents and hit a high of 65 cents. The May 5 calls (LJJEA, $1.00, up $0.15) were profiled at 65 cents and traded as high as $1.20. The exit target is $1.30.
Profits could have been taken and on either one of these positions and if you didn’t take them, be careful. Casino stocks are getting some Wall Street love right now as MGM Mirage (MGM, $5.53, up $0.88) and Wynn Resorts (WYNN, $31.20, up $1.55) are also rising. If the trades get “crowded”, sell them if it looks like you might be giving back profits.
And last, but certainly not least, Dendreon (DNDN, $6.58, up $0.59) was up another 10% and traded as high as $7.35 yesterday. I heard whispers that the “sell, sell, sell..” button was stuttering on the tube last night and I was afraid that once Dendreon got “hot” this would happen. We were in this trade like cotton on sheep back in late March, and, so far things have gone according to plan.
The April 10 calls (UKODB, $0.45, down $0.10) hit a high of 90 cents on Monday after trading to $1.05 on Friday. I said we had to be careful with these on Sunday night because they expire next week. And, the market is closed Friday. The call options did double once again from our entry price but I’m still holding.
Despite the nay-sayer’s, I still think we get an announcement sooner rather than later. I might run the April 10’s in the ground meaning this is still an all or nothing trade and I could crash and burn with them. The problem is not knowing when the announcement is coming. As we get closer to Thursday though, I may change my mind on the April calls if the position is profitable.
I’m not too worried with the May 7.50 calls (UKOEU, $2.40, up $0.35) as I am with the April call options. The May 7.50’s have plenty of time to mature. Either they are going to be worth a whole lot more or less than a quarter. These call options were profiled at $1.50 and have held steady since they were mentioned.
Dendreon could be on to something (again) and all signs are pointing that the test results are going to be positive. It’s kind of like Dendreon has the Provenge present and is putting it under the tree. All the FDA has to do is wake-up and unwrap it.
Rick Rouse
Rick@OptionsMentoring.com
