September 2009 | Members

8:45am (EST)

Current Trades

ChangeYou.com (CYOU, $38.29, down $0.46) 

October 42 calls (CQUJP, $0.85, down $0.30)

Entry Price: $0.85 (9/21/09) 

Exit Target: $1.30

Return: 0%
Stop: $0.35

Action:  ChangeYou opened lower on Monday and fell near its support level when it dipped to a low of $37.29.  All we are looking for is the stock to make a run to $40 this week while holding $37.  If shares fall below $35 or the 35 cents stop is hit we will exit the trade. 

Shanda Games (GAME) should hit the exchange this week (Thursday or Friday) and if it is well received we are hoping ChangeYou follows suit.  Shanda Games is a spinoff of Shanda Interactive Entertainment (SNDA, $53.53, down $0.67) which was up 2% to $54.75 in after-hours trading last night. 

Citigroup (C, $4.43, up $0.17)

January 7.50 calls (CAQ, $0.12, up $0.01)

Entry Price: $0.32 (8/28/09)

Exit Target: $0.64

Return: -63%
Stop:  None  

January (2011) 10 calls (VRNAB, $0.42, flat)

Entry Price: $0.60 (8/28/09) 

Exit Target: $1.20

Return: -30%
Stop: None

Action:  These call options got beat-up last week when Citigroup touched a low of $4.11 and $4.15.  The stock started lower on Monday but rebounded sharply.  Although these two positions were profitable at one point, we will need the stock to trade back over $5 before we get anywhere near our entry price.

At the time of the trade the market was looking for direction so we went longer out on the options to protect us from the volatility.

Dendreon (DNDN, $29.46, up $0.26)

November 45 calls (UQBKO, $0.90, down $0.05)

Entry Price: $0.30 (8/31/09) 

Exit Target: $0.60 (closed half at 50 cents on 9/15)
Return: 133%
Stop: 30 cents 

Action:  Dendreon was lower for much of the day but broke through positive territory for good late in the afternoon.  Volume picked up right around 2pm as the stock made another 52-week high when it hit $30.24.  The options traded to a low of 75 cents before bouncing back.

Imax (IMAX, $8.96, up $0.01)

March 2010 12.50 calls (IMQCV, $0.35, flat)

Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: -22%
Stop: None 

Action: Continue to hold. 

International Business Machines (IBM, $121.57, down $0.54)

October 130 calls (IBMJF, $0.50, down $0.20)

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

Action:  IBM needs to hold $120 or else this position is in danger of getting stopped out.  IBM marches to a different drum sometimes and that first patch of resistance ($122-$123) could be tough to clear.  The stock has tested this level the past four trading sessions and we would like to see a break above $123 this week.  Otherwise, we may shut this one down early.

Research In Motion (RIMM, $84.16, up $0.54)

October 100 calls (RULJT, $1.07, up $0.02)

Entry Price: $1.00 (9/17/09)
Exit Target: $1.50-$2.00
Return: 7%
Stop: 50 cents

Action:  The calls traded to a high of $1.22 as the stock reached a high of $84.81.  We are targeting a run to $86-$87 for the stock BEFORE earnings which should get the calls to $1.75 or so.

Sirius XM (SIRI, $0.66, down $0.02)

December 1 calls (QXOLA, $0.05, flat) 

Entry Price: $0.15 (8/21/09)
Exit Target: $0.30
Return: -67%
Stop: None

Action:  Can someone tell Sirius to do a 20-to-1 reverse stock split like AIG (AIG, $48.40, up $8.49) did?  AIG is another story and is primed for a strangle option trade if the options weren’t so expensive…