September 2009 | Members

9:10am (EST)

Current Trades
 
Citigroup (C, $4.52, down $0.09)
 
January 7.50 calls (CAQ, $0.15, down $0.01)
 
Entry Price: $0.32 (8/28/09)
Exit Target: $0.16
Return: -53%
Stop:  None  
 
January (2011) 10 calls (VRNAB, $0.42, down $0.03)
 
Entry Price: $0.60 (8/28/08) 
Exit Target: $1.20
Return: -30%
Stop: None
 
Action:  I know a lot of you are growing impatient with this trade but remember it is months out and they were very “cheap” options when they were profiled.  True, they are cheaper now but sometimes we have the luxury of holding cheap out-of-the-money options because they are “cheap” to begin with.  Read on happy campers…
 
Dendreon (DNDN, $27.43, up $3.59)
 
November 45 calls (UQBKO, $0.55, up $0.30)
 
Entry Price: $0.30 (8/31/09) 
Exit Target: $0.60 
Return: 83%
Stop: None
 
Action:  OK.  A buyout didn’t come this morning and who know if and when one is coming.  However, like I mentioned last night, our strike price is currently WAY out-of-the-money on the November 45’s so we have to be careful.  I don’t think we get a buyout offer this week but it sure feels like one is around the corner.  Nothing wrong with locking in half profits today at some point.
 
Disney (DIS, $28.08, down $0.34)
 
October 27.50 calls (DISJY, $1.40, down $0.22)
 
Entry Price: $0.80 (9/10/09) 
Exit Target: $1.60 (closed half @ $1.50 on 9/11/09)
Return: 94%
Stop: $1.25 (on other half)
 
Action:  Disney hit a low of $27.79 and the options traded as low as $1.30.  Our stop is $1.25 on the other half of the position.
 
Freeport McMoRan (FCX, $70.62, up $0.25)
 
October 80 calls (FHZJP, $1.10, down $0.15)
 
Entry Price: $1.00 (9/14/09) 
Exit Target: $1.50-$2.00
Return: 10%
Stop: $0.50
 
Action:  The calls traded as low as 92 cents after the 1pm blog and were at 99 cents when I did the write-up.  Freeport rebounded with the rest of the market and it was good to see $70 hold.  Notice I have two exit targets or a range.  Remember $73 is slight resistance before the 52-week high of $77.  If we get to $71 we should get to $1.50 on the calls and at $72 we should print $2.
 
Imax (IMAX, $9.82, flat)
 
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 rumor mill is also getting cranked up after Disney’s purchase of Marvel Entertainment.  DreamWorks Animation (DWA, $36.64, up $1.35) which hit a 52-week high on Monday is on the tip of everyone’s tongue as the next takeover target.   
 
Sirius XM (SIRI, $0.64, 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:  The release date for Sirius’ new iPod docking station (XM SkyDock) is October 19th so hang in there folks.  This new toy will merge iTunes with live satellite radio which will turn millions of iPod users on to new music.  Which means more iTunes sales for Apple (AAPL, $173.72, up $1.56).  Sirius’ goal will be to turn those users into premium subscribers.