9:15am (EST) Garmin (GRMN, $30.85, down $0.74) December 25 puts (GQRXE, $0.85, up $0.10) Entry Price: $0.75 (10/29/09) Exit Target: $1.50+ Return: 13% Stop: None Action: Google will be offering FREE GPS directions in its Android phones and as a service for other mobile phones. This is all you need to know to figure out why we are going short on Garmin. Yes, Garmin is 800-pound gorilla in the space but there is a new sheriff in town, folks. This is also Garmin’s money season as Christmas rolls around but we doubt people are going to buying something that they can now get free. It may take a quarter or two but Gamin’s earnings are going to suffer. The put options were at 70 cents when our alert went out yesterday and we also said do not pay more than 80-85 cents for these options. Some of you may be wondering why we give a “limit price” and then say don’t pay more than x amount if it is above the limit. We do this because we know some of you may be busy when our trades come out. The quotes we give in the updates are as close to real time as we can make it. We include the time to give you an idea on exactly when we profile a trade and when the “alert” is sent out. We do not have a stop on this position. Apollo Group (APOL, $58.15, down $1.91) November 55 puts (OAQWK, $1.65, up $0.45) Entry Price: $1.00 (10/28/09) Exit Target: $2.00 Return: 65% Stop: 50 cents Action: The puts hit a high of $2 shortly after our update yesterday and the exit target is right there. We are targeting the $55 area. The stock fell to a low of $56.63 and we can probably expect these options to hit $3 if the stock falls to $55 today. We would like to be out of the trade by next week because the options will expire three weeks from today. We consider this a danger zone when working with out-of-the-money options. Time premium will rapidly start to decay from here on out so we will have to watch these options like a hawk. First Solar (FSLR, $126.47, down $25.11) November 115 puts (QHBWC, $2.40, up $0.90) Entry Price: $1.00 (10/27/09) Exit Target: $2.00 Return: 140% Stop: $2.00 Action: The puts opened at $3.20 yesterday. We always mention to sell into strength and the puts have traded as high as $3.99. We may have gotten greedy by not telling you to sell into strength but our stop still gets us a triple-digit return. Many of you wrote me personally and said you got out over $3 and we are so glad many of you made over 200%. That’s our job and we love hearing and reading your comments. Keep ’em coming. Abercrombie & Fitch (ANF, $34.23, up $1.29) November 34 puts (ANFWL, $1.60, down $0.65) Entry Price: $0.90 (10/20/09) Exit Target: $1.90 Return: 111% Stop: CLOSED Action: Abercrombie bounced off support yesterday and we were stopped out at $1.90. Many of you got out at $2+ but we thought the downward momentum would continue. It still might but we would love to see the stock run back up to $37.50. If the stock runs back to resistance which is $37-$38 it may set us up for another trade, possibly in some December put options. Stay tuned… ]]>
