I have taken your requests and have tweaked how I’m going to profile the trades we are currently following and for the new ones down the road. I use to do it this way in the Weekly Wrap but have added a few features. As always, keep the comments and suggestions coming. So here are the current trades and my thoughts on each of them. I normally don’t like profiling so many “open” positions but some of the trades are from when we initially launched the trading service in early June.
Ford (F, $6.38, up $0.18)
December 6 calls (FLI, $1.23, up $0.03)
Entry Price: $1.25 (5/18/09)
Exit Price: $2.50
Return: -2%
Stop: 60 cents
December 7 calls (FLJ, $0.80, up $0.10)
Entry Price: $1.00 (5/18/09)
Exit Price: $1.50-$2.00
Return: -20%
Stop: 50 cents
Action: I still like BOTH options at current levels and believe Ford has a chance to hit $10 by year-end. Ford will announce earnings on Thursday and the December call options have 140+ days before they expire. The 52-week high is $6.54 and the stock was up another 9 cents in after-hours.
Bank of America (BAC, $12.23, up $0.04)
November 15 calls (BYOKO, $0.65, down $0.02)
Entry Price: $1.50 (6/12/09)
Exit Price: $2.25
Return: -57%
Stop: If BAC falls below $11, close the position.
Action: Ugly. I had kept this one open because these call options will be worth at least $3 if the stock can make it to $18 in 4 momths which is when the November options expire. I know I keep 50% firm stops but this position is different. The calls were right back at even before BofA announced earnings and I knew the risks going in. However, this position feels like death by a thousand cuts.
Cisco Systems (CSCO, $21.45, down $0.14)
October 20 calls (CYQJD, $2.23, down $0.06)
Entry Price: $1.50 (6/2/09)
Exit Price: $3.00
Return: 49%
Stop:
Action: I echoed that if Cisco can get to $25 then these options are worth $5. For those of you who have just signed on, I had liked these calls up to $2.00 but that entry point has also passed. Stops are set at $2.00.
IBM (IBM, $115.57, down $1.47)
August 105 calls (IBMHA, $10.70, down $1.30)
Entry Price: $3.40 (7/14/09)
Exit Price: $10.00
Return: 215%
Stop: $10.00-$10.50
August 115 (IBMHC, $2.85, down $0.85)
Entry Price: $1.05 (7/16/09)
Exit Price: $2.00
Return: 171%
Stop: $2.00-$2.25
Action: These exit prices are set higher than the 50%-100% normal exit targets because IBM has been on a roll since announcing earnings last Thursday. There are also two stops listed because you are closing half when the stops of $10.50 and $2.25 are hit and you are closing the other half of the position if the call options fall below $10.00 and $2.00…Doyle’s favorite hand in poker. Like I said the other day, it has been one heck of a ride but like all good things they come to an end. I’d like to see IBM continue its uptrend but we could get stopped out if we have a down day on Thursday.
USEC (USU, $5.84, up $0.01)
August 7.50 calls (USUHU, $0.26, down $0.01)
Entry Price: $0.52 (7/16/09)
Exit Price: $1.00
Return: -50%
Stop: None
Action: This was an all-or-nothing trade and I explained that going in. We are hoping for a rally before news comes out that the company is getting funding for a secured loan of $2 billion. USEC has a monopoly on the uranium market and about 30 plants ready to go.
Fairchild Semiconductor (FCS, $8.83, up $0.16)
August 10 calls (FCSHB, $0.15, flat)
Entry Price: $0.17 (7/16/09)
Exit Price:$0.34
Return: -12%
Stop: $0.10
Action: I thought we we see some more momentum today as the stock made a move towards $9 and FCS managed to do well in a rather lackluster day. I’d like to see a move to $9-$10 by NEXT week. I would not start new positions here until we see what the bulls do on Thursday and Friday.
Chipotle Mexican Grill (CMG, $88.78, up $0.08)
August 95 calls (CMGHS, $2.20, down $0.10)
Entry Price: $2.00 (7/21)
Exit Price: $3.25
Return: 63%
Stop: CLOSED
Action: I told you the smart money takes profits off the table and warned about getting out BEFORE earnings. Afte the bell the company beat Wall Street’s expectations but gave a cautious outlook. Not good when everybody is blowing away numbers and raising guidance. The stock could recover before the opening bell but in after-hours shares were down almost $3.
DryShips (DRYS, $6.11, down $0.04)
August 7 calls (OOCHJ, $0.25, flat)
Entry Price: $0.25 (7/21/09)
Exit Price: $0.50
Return: 0%
Stop: None
September 7.50 calls (OOCIU, $0.32, 0.03)
Entry Price: $0.35 (7/21/09)
Exit Price: $0.70
Return: -9%
Stop: $0.20
Action: DryShips is capable of explosive moves and all we need is a run to $7.25-$7.50. This is a high risk/ high reward play and is based on market momentum. The company reports earning next Friday and that will be a crap shot but shipping rates are picking up and this should really be a $10 stock.
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