9:30am (EST)
Bank of America (BAC, $16.68, up $0.26)
November 17.50 calls (BYOKZ, $1.50, up $0.10)
Entry Price: $1.25 (8/10/09)
Exit Target: $2.50
Return: 20%
Stop: 60 cents
November 20 calls (BYOKT, $0.70, up $0.04)
Entry Price: $0.50 (8/10/09)
Exit Target: $1.00
Return: 40%
Stop: 25 cents
Cisco Systems (CSCO, $21.64, down $0.55)
October 20 calls (CYQJD, $2.13, down $0.51)
Entry Price: $1.50 (6/2/09)
Exit Target: $3.00 (8/4/09 1/2 the trade was closed)
Return: 80%
Stop: $2.50 (CLOSED)
Action: The call options opened at $2.45 so our stop on the other half was hit on the open. Tech looked weak on Monday…
Visa (V, $68.88, down $0.29)
August 70 calls (VEHHN, $1.00, down $0.20)
Entry Price: $1.60 (7/27/09)
Exit Target: $3.20
Return: -38%
Stop: 80 cents
Action: We could get stopped out of this one today. You could set stops at 75 cents to buy a little more wiggle room but $70 is proving to be a brick wall.
Imax (IMAX, $9.05, down $0.30)
September 7.50 calls (IMQIU, $1.70, down $0.20)
Entry Price: $1.90 (8/4/09)
Exit Target: $3.00
Return: -11%
Stop: $1.50, lower to $1.00
March 2010 12.50 calls (IMQCV, $0.45, down $0.05)
Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: 0%
Stop: None
Action: The Imax story has been a topic of the blog for quite some time. I will be running a more detailed story on the company later in the week. We added the March 12.50’s to the portfolio and these calls do not expire until March, 2010.
Imax was a $20 stock back in the 1990’s and it has taken some time for the company to see the fruits of its labor as it rolls out its digital technology. However, the business model could finally be coming together as Imax has the pieces in place to be a powerhouse in the movie industry. New system installations will help build a larger established theater base and the company is sure to get the “cream of the crop” movies for years to come.
There is no stop on the March 12.50’s. This is an all-or-nothing trade and one that you shouldn’t need to watch on a daily basis. If you bought 10 contracts it would have cost you under $500. It is trade that has the potential to return 650% if Imax is at $20 in 8 months. The call options would be worth at least $7.50 if that were the case and you would be looking at $7,500 from a $500 investment.
PowerShares QQQ’s (QQQQ, $39.60, down $0.28)
August 40 calls (QQQHN, $0.50, down $0.13)
Entry Price: $0.65 (8/7/09)
Exit Target: $1.30
Return: -23%
Stop: 30 cents
Action: Keep your fingers crossed.
Two stocks going in opposite directions yesterday…
Research In Motion (RIMM, $73.28, down $3.81) tanked 5% yesterday and option traders were all over the August 70 puts (RFYTN, $0.94, up $0.62) yesterday. I missed the boat on this one as they opened at 46 cents. The company got slapped with a downgrade although the analyst stopped short of saying Apple (APPL, $164.72, down $0.79) is eating RIMM’s lunch.
I did tell you about Priceline.com (PCLN, $150.24, up $18.92) though. Right before the opening bell the stock was up $6. The August 150 calls (PNEHJ, $4.60) opened at $1.75. I didn’t think the stock would move $20 to be honest with you. Maybe $10, but $20 was an incredible pop.
Of course, it is too late to trade either of them but if you see a strong trend developing fo the day, don’t be afraid to pull the trigger on a “day trade”.
