September 2009 | Members

 

1:00pm (EST)

Watch the RIMM October 100 calls (RULJT, $0.95, up $0.12).  If you think we go higher to start the week then you could open half positions at these levels. 

 

9:00am (EST)

CURRENT TRADES (quotes are from Thursday’s close)

Apple (AAPL, $184.55, up $2.68). 

October 200 calls (APVJT, $2.00, up $0.60)

Entry Price: $0.85 (9/16/09)

Exit Target: $1.70, raise to $3.00 (closed half at $1.70 on 9/16)

Return: 118%
Stop:  $1.00, raise to $1.70

Action:  The other half of this Apple trade has passed our exit target and we probably should have gotten out of the other half yesterday as the calls hit a high of $2.95.  That represents a return of nearly 250% on the other half if you got in at 85 cents.

The exit target has been raised to $3.00 for the other half and hopefully we get back up there today.  If not and Apple retreats then our stop of $1.70 is set to lock in 100% profits.  I would love to keep this trade open but it has already surpassed our expectations.  If our stop is not hit then we will continue to raise it if Apple keeps moving higher. 

Citigroup (C, $4.42, up $0.22) 

January 7.50 calls (CAQ, $0.14, up $0.02)

Entry Price: $0.32 (8/28/09)

Exit Target: $0.64

Return: -56%
Stop:  None  

January (2011) 10 calls (VRNAB, $0.44, up $0.04)

Entry Price: $0.60 (8/28/08) 

Exit Target: $1.20

Return: -27%
Stop: None

Action:  Hold.  

Dendreon (DNDN, $28.90, up $2.09)

November 45 calls (UQBKO, $0.95, up $0.40)

Entry Price: $0.30 (8/31/09) 

Exit Target: $0.60 (closed half at 50 cents on 9/15)
Return: 142%
Stop: 30 cents (new)

Action:  If you invested $900 in this trade you are looking at a sweet return.  These calls were at 30 cents and traded to a low of 20-something cents.  If you bought 30 contracts you would have closed 15 contracts at 50 cents which put back $750 of the $900 you have invested.  The other 15 contracts are now worth $1,425. 

I wanted to explain this because I’m trying to report the exact return for a trade.  I normally don’t close half positions and if you will look at the track record it will reflect that.  I still think the market is poised to go higher…I just don’t want to get too greedy.

This position did not have a stop but now that it is profitable we need to protect our profits.  Dendreon will be on stage in New York next week on September 24th. 

Freeport McMoRan (FCX, $71.47, down $0.68)

October 80 calls (FHZJP, $1.15, down $0.30)

Entry Price: $1.00 (9/14/09) 

Exit Target: $1.50-$2.00 (closed half at $1.50 on 9/16, closed other half yesterday)
Return: 28%
Stop: CLOSED

Action:  Don’t shoot the messenger.  Sometimes it is east to read a chart and find exact support and resistance lines and I had nailed Freeport pretty well except for the stop.  Our original stop was 90 cents and I raised it to $1.05 yesterday before the bell.  The call options traded as high as $1.55 as the stock made it to $72.95. 

I had mentioned this area of resistance for Freeport ($72-$73) and once we got to $73 we pulled back.  I had factored in a pullback but I was off by pennies as the call options traded to a low of $1.02.  It sucks but the trade was stopped out.

I would almost suggest going long again if the calls get down to $1.00 or below but I don’t like opening trades on Friday.  When you do, you lose some weekend premium right off the bat so I tend to wait until Monday’s to see if the same opportunity is still there.

Imax (IMAX, $9.50, down $0.35)

March 2010 12.50 calls (IMQCV, $0.50, down $0.10)

Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: 11%
Stop: None

Action:  Continue to hold.

International Business Machines (IBM, $121.88, up $0.06)

October 130 calls (IBMJF, $0.75, down $0.03)

Entry Price: $0.60 (9/17/09)
Exit Target: $1.20
Return: 36%
Stop: 30 cents

Action:  Here was yesterday’s game plan:

“If IBM is weak and breaks below $120 then we will forget the trade.  If we can hold or just open a little lower than try to get in for under 85 cents.  Use a limit order of 95 cents or $1.00 and look for a possible run to $1.50-$2.00.  Confirm market direction…” (END)

IBM did in fact open lower from Wednesday’s close of $121.82.  Shares started the day at $121.15 and the calls dipped to a low of 55 cents.  They traded as high as 94 cents when IBM reached $122.78.

I also wanted to remind you that $125 will be a big, BIG hurdle for the stock. And because of that there will be a huge risk of time decay to this position.  The $125 level is important as it represents a one-year high while $130 would represent an all-time high for IBM.

We need to remember this in case we stall at current levels.

Sirius XM (SIRI, $0.68 down $0.01)

December 1 calls (QXOLA, $0.10, flat) 

Entry Price: $0.15 (8/21/09)
Exit Target: $0.30
Return: -33%
Stop: None

Action:  Hold.