September 2009 | Members

11:00pm (EST)

Bank of America (BAC, $17.59, down $0.39)   January 20 calls (BYOAT, $1.42, down $0.11)   Entry Price: $1.18 (8/12/09) Exit Target: $1.80 Return:  20% Stop: $1.30   Action:  BofA traded to a low of $17.45 and the call options hit $1.31.  Our stop is $1.30 so we are still in the trade.  The stock trade to a high of $18.25 on Friday but faded to close at $17.98.  The shares traded to a high of $17.90 right before lunch and also faded again today.  We have been in this trade for a little over two weeks but we are still showing a decent return.  If BofA can resume its uptrend we will raise the stop along the way.   Citigroup (C, $5.00, down $0.23)   January 7.50 calls (CAQ, $0.29, down $0.05)   Entry Price: $0.32 (8/28/09) Exit Target: $1.00 Return: -9% Stop:  None     January (2011) 10 calls (VRNAB, $0.60, down $0.03)   Entry Price: $0.60 (8/28/08)  Exit Target: $2.00 Return: 0% Stop: None   Action:  The positions DO NOT have stops.  They are longer-term plays that are meant to take the emotion out of the current market environment.  Yes, they might get cheaper but I think Citigroup could be at $15 by 2011.   Dendreon (DNDN, $23.37, down $0.41)   November 45 calls (UQBKO, $0.30, down $0.03)   Entry Price: $0.30 (8/31/09) Exit Target: $0.60  Return: 0% Stop: 15 cents    Action:  Hopefully, we got a good entry point today as the stock started off Monday’s session lower like the rest of the market.  The current Bid is 28 cents and the Ask is 33 cents.  If you are not in the trade and decide on getting in, make sure you use limit orders and split the difference.   Human Genome Sciences (HGSI, $19.76, down $0.04)   September 25 calls (HQIIE, $0.35, down $0.05)   Entry Price: $0.70 (8/26/09) Exit Target: $0.60 (8/27/09) Return: -14% Stop: 35 cents   Action:  The stock hit a high of $20.49 on Friday and I suggested getting out of the trade for a small profit last Wednesday night.  “If we get another pop on Thursday’s open, even if it’s only up to $1.00-$1.25, make sure you walk away with a profit.  The 35 cent stop is a “loose” one if you want to stay in the trade and believe a buyout is coming over the next few weeks.”   Well, we never got the “pop” on Thursday as the stock actually traded lower.  For those of you who decided to stay in it looks like the M&A activity is heating up and that could help things.   Imax (IMAX, $9.40, up $0.29)   March 2010 12.50 calls (IMQCV, $0.40, unchanged)   Entry Price: $0.45 (8/10/09) Exit Target: $1.00+ Return: -11% Stop: None   Action:  The Bid is 30 cents and the Ask is 50 cents.  If you were to buy 20 contracts you would put a “limit order’ in for 35 or 40 cents.  Don’t put in a market order because you will get filled at 50 cents!     The big picture here is that I’m looking for Imax to trade to over $15 in the next six months.  Remember that when you do this trade.  There is a chance these options go down to 20 cents if the stock falls back below $9.  I don’t think that will happen but be prepared for it if we do.  The big moves should come on the company’s next earnings report and the Christmas movie season.  I thought we would see a bigger pop after the Walt Disney (DIS, $26.04, down $0.80) and Marvel Entertainment (MVL, $48.37, up $9.72) merger but we will have to settle for what the market gives us.   Good for Marvel.  I profiled a Marvel trade back on April 23rd when the stock was at $28.  We went long the June 30 call options at $1.05 and closed them two weeks later on May 7th at $4.00.  The stock had made it to $33 by then and we were out for a profit of 280%.  Research the blog and you will see my comments on Marvel at the time.  My only regret, now, is that I wished I would have made it a September 30 call (MVLIF, $18.50, up $9.90)…   Sirius XM (SIRI, $0.67, down $0.02)   December 1 calls (QXOLA, $0.12, flat)   Entry Price: $0.15 (8/21/09) Exit Target: $0.30 Return: -20% Stop: None   Action:  There is still heavy volume in these calls as over 4,000 contracts traded hands today.  The Bid remains 10 cents, the Ask is 15 cents.]]>