9:20am (EST)

The financials stocks rallied yesterday and one particular trade we had on our Watch List was a play on Bank of America (BAC, $12.69, up $1.85). The stock gained 17% but the June 13 calls (BYOFM, $1.72, up $0.78) soared 83%. I mentioned they could have a “huge” day and they opened at $1.15. Nearly 20,000 contracts traded hands and these calls were hot all day. They briefly touched a low of $1.10 and a high of $1.80. These calls should zoom again today as the stock is up to nearly $15 in pre-market trading!

Las Vegas Sands (LVS, $10.25, down $1.09) fell below $10 on Wednesday which was something we were keeping an eye on as well. It would have been a bold move to pick up the June 15 calls (LVSFZ, $0.55, down $0.50) which fell nearly 50% and traded as low as 35 cents but judging by the option activity, we had a few takers. If you bought at the lows then some traders made 50% by the close. A run back above $1 is a 100%+ return.

MGM Mirage (MGM, $11.78, down $1.02) didn’t make it below $10 but the June 15 calls (MGMFC, $0.95, down $0.40) dropped 30% and fell to a low of 85 cents. I wouldn’t jump into both positions if there is another pullback and would close half the position if Las Vegas Sands bounces back today and you squeeze 100% out of it.

We have to say goodbye to Marvel Entertainment (MVL, $32.95, down $0.07) for the time being. I love covering the options on this stock because they have done well for us over the past couple of years since I started here at OptionsMentoring.com. This time around we rode the June 30 calls (MVLFF, $3.80, down $0.20) for monster gains. I recommended the call options in the blog on April 23 when they were going for $1.05. After selling half at $2.10, we rode this magic carpet for a nice 300% gain and had set stops at $4.00.

Marvel could still get to $35 but our stop was hit. Although the trade is over, I can’t wait to check out the new Wolverine movie this weekend. Should be a classic, right Mr. Schuler?

Rick Rouse