9:05am (EST)

Research in Motion (RIMM, $55.74, down $2.99)

November 55 puts (RFYWK, $2.25, up $1.10)

Entry Price:  $1.00 (10/30/09)
Exit Target: $2.00
Return: 153%
Stop: $2.00 (sold half @ $2.80 on 11/2) (see special note)

Action:  Wow!  Research In Motion fell to a low of $54.30 on Monday after an analyst downgraded the stock to a “Sell” rating from “Buy”.  It looks like we beat the Street to this trade as we told you the smart-phone trade was getting long in the tooth.

The put options hit a high of $2.95.  We said to close half in our afternoon update yesterday when the puts were going for $2.80.  We also said to place a stop of $2.00 on the other half.

RIMM has entered the “freefall” that I was trying to show on the chart and hopefully shares continue lower from here on out.  If we do get a rebound the stop is place to protect the other half.  If the position is stopped out at $2.00 the return would be 140%.

If we are not stopped out, we will raise the stop along the way to lock in further profits.  Remember, these options expire on November 20th.

Special Note:  RIMM is up 50 cents in pre-market trading this morning so be careful with the $2.00 stop if you want to keep the other half of the trade open.  You can lower this to $1.75 if you want to give it a little more wiggle room but if we are stopped out we may just roll the position into some December put options.


Garmin (GRMN, $30.46, up $0.59)

December 25 puts (GQRXE, $0.90, down $0.20)

Entry Price:  $0.75 (10/29/09)
Exit Target: $1.50+
Return: 20%
Stop:  50 cents

Action:  Continue to hold.


Apollo Group (APOL, $57.36, up $0.26)

November 55 puts (OAQWK, $1.60, down $0.20)

Entry Price:  $1.00 (10/28/09)
Exit Target: $2.00
Return: 60%
Stop: 50 cents, raise to $1.10

Action:  Continue to hold.