12:30pm (EST) ChangeYou.com (CYOU, $43.18, down $2.34) opened the morning at $46.74 and hit a high of $46.85 before tumbling to a low of $40.81. The July 50 calls (CQUGJ, $0.70,down $0.60) OPENED at $1.60 and hit a low of 55 cents. These calls were profiled at 75 cents and at $1.50 represented a 100% return. Of course, I told you not to chase and I’m not ready to get back into the position yet. Also, the July 45 calls (CQUGI, $1.95, down $1.28) have come down off a high of $4.00 and have traded as low as $1.40. The volatility has picked up in the stock and if you wanted, you could start a HALF position on the July 50’s with a limit price of $0.75 at current levels. If they trade lower then you could pick up the other half at lower levels. This is a very high risk/ high reward trade As far as Imax (IMAX, $8.36, up $0.17), the drama hasn’t been as great as the stock has stayed in positive territory all morning. The high has been $8.49 and i had mentioned a stop of $7.75. Raise it to $8.00. The July 7.50 calls (IMQGU, $0.95, up $0.05) opened at $1.05 and were profiled at 35 cents last Thursday morning. Set a stop of 75 cents on these call options. The September 7.50 calls (IMQIU, $1.30, down $0.08) were profiled at 85 cents and a stop of $1.20 is almost a 50% return. The longer month options aren’t going to move as much as the July calls and the volume in the September options just isn’t there. The December 7.50 calls (IMQLU, $1.75, up $0.10) have traded a 100 contracts so far so there appears to be some long-term players coming in. The December calls were profiled at $1.25 and a stop of $1.30 could be used. That doesn’t leave much room for a profit and after commissions you probably break even but at least it won’t be a loss if Imax slips from here. I thought we would get a bigger pop but the stock has gained 20% since last Wednesday. Still, Imax hasn’t turned a profit and until it does it is a stock you can’t trust. Profitability is coming, it’s just a matter of when. Ford (F, $5.81, up $0.20) is up 3% and I would like to see a run back to $6 by the end of the week. Bank of America (BAC, $12.96, up $0.21) is making a run at $13 and Cisco Systems (CSCO, $19.05, up $0.14) is back over $19. Overall, I’d say were are having a better day than Madoff…he got 150 years. Rick Rouse Rick@TheOptionInvestor.com]]>
