Intel (INTC, $18.05, up $1.22). Even better was the fact that the company also issued higher guidance for the third quarter. The news carried the entire Tech sector higher as it outpaced the other indexes by gaining 3.5%. The Nasdaq finished at 1,862, up 63 points for the day. The Dow rallied 256 points to 8,616 while the S&P 500 added 27 to close at 932. We caught some of the action by playing IBM (IBM, $107.22, up $3.97). If you didn’t make enough money to pay for this month’s membership of $97 then shame on you. I was all over this trade like grass on dirt today and there was some easy money to be made. I also outlined the risks so lets see where we are. IBM went out on its high and the July 105 calls (IBMGA, $3.05, up $2.05) opened at $1.65. Look at where they closed. A kickass double fell right in our lap today, ladies and gentleman. The key was to wait and I mentioned that before the opening bell. These calls stayed right at their opening price and they gave you a nice payday. If you bought just 10 contracts, you are looking at nearly a $1,400 profit if you closed them before the bell sounded. If you had bought 25 contracts, you made $3,500 profit. The August 105 calls (IBMHA, $4.55, up $1.90) opened at $3.10 and were at $3.40 shortly after the opening bell. Ten contracts meant $1,000. Now, we will have to wait and see what IBM does in the morning but if you made that kind of money I was beating the drum to get out. Two key lessons from trading an earnings event like this. Find cheap out-of-the-money calls and ride them BEFORE earnings come out. Also, I have mentioned how the first 15-20 minutes work after the opening bell and we avoided that trap as well. We all know IBM is a beast when it comes to reporting numbers but anything can happen. This is where a lot of options traders lose their trading capital by leaving the ENTIRE position open heading into to earnings only to see the position wiped out the very next day. Bank of America (BAC, $13.42, up $0.51) gained 4% today and the November 15 calls (BYOKO, $1.40, up $0.20) added 17%. I profiled this trade on June 12th at $1.50 and it has made a nice comeback. Many of our new subscribers that have just joined may have gotten in for under $1.00. These calls have been strong all week and D-Day is Friday. The company will announce earnings so we will have to monitor this one carefully on Thursday. Cisco Systems (CSCO, $19.81, up $1.08) also had an outstanding day as it added nearly 6%. I profiled a couple of trades on June 2nd and we closed out the July 20 calls (CYQGD, $0.14, up $0.13) on June 17th. We left the October 20 calls (CYQJD, $1.20, up $0.45) open and our original entry price was $1.50. I held to my guns with this one and although we are not out of the woods just yet, we are getting there. However, some of you were snapping these calls up at 70 cents so manage your positions accordingly. These call options still have over 3 months before they expire and I’m hoping Cisco is at $25 by then. One last note. Imax (IMAX, $8.41, up $0.21) set a new high today and I profiled three different trades on June 25th. The July 7.50 calls (IMQGU, $1.00, up $0.35) were profiled at 35 cents and we were out on July 2nd at 85 cents (147% return). We scaled out of the September 7.50 calls (IMQIU, $1.30, up $0.35) after that Barron’s story on July 6th at $1.00. Our entry price was 85 cents so it was still an 18% profit but I told you how Barron’s always seems to be on the wrong side of the trade. I also profiled the December 7.50 calls (IMQLU, $1.65, up $0.35) at $1.25 and we were out at $1.60. Now you know why I can’t stand the publication…it is an old skeleton that seems to pop up every now and then. See ya’ in the AM. Rick@MomentumOptionsTrading.com]]>
