9:25am (EST)
Bank of America (BAC, $15.85, down $0.83)
November 17.50 calls (BYOKZ, $1.20, down $0.30)
Entry Price: $1.25 (8/10/09)
Exit: $1.25 (8/11/09)
Return: 0%
Stop: CLOSED
November 20 calls (BYOKT, $0.56, down $0.14)
Entry Price: $0.50 (8/10/09)
Exit: $0.57 (8/11/09)
Return: 14%
Stop: CLOSED
Action: We closed out the Bank of America call options because I didn’t like what I was seeing with the Financials. The stock was higher in the morning session on Tuesday and when it started to fade we closed the trade. Like I said yesterday, these were “rollover” positions from an earlier trade but there was too much risk heading into the FOMC meeting to stay long.
Visa (V, $68.61, down $0.27)
August 70 calls (VEHHN, $0.70, down $0.30)
Entry Price: $1.60 (7/27/09)
Exit: $0.80
Return: -50%
Stop: CLOSED
Action: We saw this one coming and I said last week it looked like we were going to have trouble with $70. We probably should have closed this trade sooner but our stop wasn’t hit until Tuesday. Still, it’s okay to close a trade early if you gut tells you that you are fighting a losing battle.
Imax (IMAX, $9.11, up $0.06)
September 7.50 calls (IMQIU, $1.75, up $0.05)
Entry Price: $1.90 (8/4/09)
Exit Target: $3.00
Return: -8%
Stop: $1.00
March 2010 12.50 calls (IMQCV, $0.50, up $0.05)
Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: 11%
Stop: None
Action: Well, you want the good news or the bad news, first? Let’s go with the bad.
After the bell last night, Imax announced another stock offering. The company is selling about 6 million shares at $8.50 which should give Imax another $50 million to pay down debt. In after-hours trading the stock was down 55 cents to $8.56.
You have to hand it to Imax though. They are striking the iron while it is hot. The company just announced its first profitable quarter in three years and will use the money to pay down some debt. So it was a good move and hopefully the new shares will have a warm welcome.
The September calls will take a hit, no doubt, but keep your eyes on the prize. We have the March 12.50’s as a “cheap” out-of-the-money” play that will do well if Imax can trade to $15-$20 in 8 months.
PowerShares QQQ’s (QQQQ, $39.26, down $0.34)
August 40 calls (QQQHN, $0.31, down $0.19)
Entry Price: $0.65 (8/7/09)
Exit: $0.30 (8/11/09)
Return: -54%
Stop: CLOSED
Action: We took the wrong side of this trade on Friday after the bulls had a good week. I was expecting a follow-thru on Monday but the market has been nervous all week.
Wells Fargo (WFC, $26.89, down $1.75)
September 26 puts (FHUUZ, $1.35, up $0.50).
Entry Price: $1.30 (8/11/09)
Exit Target: $2.60
Return: 4%
Stop: $0.65
Action: We dumped BofA to go short Wells Fargo so we will see how this plays out. We don’t need a huge move to the downside to make money with the put options. Short-term I’d like to see the stock test $25 this week so we can make it a quick trade if need be.
