October 2009 | Members


    1:00pm (EST) Blackstone Group (BX, $16.80, down $0.31) January 20 calls (BXAD, $0.75, down $0.05) Entry Price: $0.65 (10/15/09) Exit Target: $1.30   Return: 15% Stop:  None Action:  We set limit prices at 60-65 cents this morning to get into this position and the calls have traded to a low of 65 cents.  If you weren’t filled at 65 cents, I still like positions at current levels which means you can still buy these options at current prices.  There is no stop listed for this trade. Dendreon (DNDN, $29.34, up $0.01) January 35 calls (UQBAT, $2.15, down $0.10) Entry Price: $2.15 (10/15/09) Exit Target: $5.00   Return: 0% Stop:  None Action:  We set a limit price of $2.00 for this position and the calls have traded to a low of $2.05.  Go ahead and pull the trigger at current prices and I like the call options up to $2.25.  Again, no stop is listed for this trade. I will be back in the morning with update on Pepsico (PEP, $62.06, up $0.44) and Imax (IMAX, $10.80, up $0.13) which set another 52-week high of $11.15 this morning! 9:10am (EST)   NEW TRADES!!! DO NOT BUY THESE OPTIONS AT THE OPEN.  WAIT 15-20 minutes until after the opening bell rings. Blackstone Group (BX, $17.11, up $1.21) Buy to Open BX January 20 calls (BXAD, $0.80, up $0.40) Action:  This is the rollout trade for those of you who were in the January 10’s.  My original write-up was for a run to $20 and we still have nearly 3 months to get there.  It would be nice if we open lower so that we can try to get these call options for under 75 cents.  Set limit prices at 60-65 cents. Dendreon (DNDN, $29.33, up $0.53) Buy to Open DNDN January 35 calls (UQBAT, $2.15, up $0.05) Action:  It’s no secret my love affair for this stock.  We may be getting in this one a little early but I haven’t been able to sleep at night because I’m scared I’m going to wake-up one morning real soon only to hear there has been a buyout offer for Dendreon.  Be careful of the “Bid” and “Ask” which is currently $2.05/ $2.20.  Use limit orders and try to get in for around $2.00.  If the stock can rally to $40 by January 15th, 2010 then these are a double…plain and simple.  If a buyout offer comes, let’s hope it is for $50 which would make these calls worth $15 apiece.  Caution!  These calls could get really cheap if the stock falters at $30 again so don’t go overboard with this one.  These trades are High Risk/ High Reward. CURRENT TRADES Intel (INTC, $20.83, up $0.34) October 20 calls (NQJD, $0.85, up $0.02) Entry Price: $0.53 (10/7/09) Exit Target: $1.20 (10/14/09) Return: 125% Stop:  CLOSED November 20 calls (NQKD, $1.22, up $0.01) Entry Price: $0.90 (10/9/09) Exit Target: $1.25 (10/14/09) Return: 39% Stop:  CLOSED Action:  Well, it’s hard to be “disappointed” with trades that produced these types of returns but I warned you that Intel could see its best gains at the opening bell and fade.  However, I was very surprised that were were stopped out of the November calls. Tuesday I said the market was pricing a 5%-10% move in the stock and when Intel reported earnings, shares jumped 7% in after-hours trading.  The reason we got the slow grind down on Intel after the initial pop on Wednesday is because traders were “too optimistic” prior to the earnings report.  We were a part of the hype but while others were waiting for Intel to rebound after the morning pop, we got out.  New or inexperienced option traders are probably still holding the October 20’s and they are in-the-money but I’d be surprised if they expire this Friday at the prices we got filled.  It’s possible because of the bullish trend but we took the emotions out of the trade and concentrated on making money. The $21-$22 level is also serious resistance for the stock so the unexpected selling pressure we had into the close can also be attributed to the run up to these levels.  It also wasn’t a big deal because Intel isn’t going to run to $25 or $30 overnight although $25 could be in the cards by year’s end.  We made a great profit in less than a week but it’s time to move on to the next trade.  Pepsico (PEP, $61.62, up $1.02) November 62.50 calls (PEPKZ, $0.95, up $0.25)  Entry Price: $1.15 (10/5/09)  Exit Target: $2.30 Return: -17%   Stop:  45 cents Action:  Continue to hold. Imax (IMAX, $10.67, up $0.24) March 2010 12.50 calls (IMQCV, $0.65, up $0.10) Entry Price: $0.45 (8/10/09) Exit Target: $1.00+ Return: 44% Stop: None  Action:  Imax continues to surge higher on no specific news and hit another 52-week high on Wednesday.  Spike Jonze’s movie on the classic children’s book Where the Wild Things Are hits the big screen this Friday which could also be a part of this week’s rally in the shares.]]>