9:15am (EST)


Wal-Mart Stores (WMT, $52.97, up $0.66)

November 52.50 calls (WMTKX, $1.14, up $0.34)

Entry Price: $0.98 (11/11/09)
Exit Target: $2.00

Return:  16%
Stop Limit: None

Action:  Whew!  There was plenty of volume in these call options yesterday as over 30,000 contracts traded hands. 

My timing couldn’t have been better (sly grin) as the calls dropped to a low of 80 cents right after the 11:30am update but we were in at slightly higher prices.  There was a news release minutes after the trade went out and we discussed it yesterday. 

We stayed strong and tugged on Superman’s cape and it looks like it paid off.  You can sell into strength this morning but you don’t have to do it right away if you are showing a nice profit.  If the calls open at $1.50 or better, set stops at $1.40, if they open at $1.60, set stops at $1.50…get the picture?  We will be back at 1pm to update the trade.

Priceline.com (PCLN, $196.80, down $7.42) 

November 200 calls (PNEKA, $4.20, down $4.80)

Entry Price:  $1.10 (11/6/09)
Exit Target: closed half at $5.00 on 11/10, half at $7.50 on 11/11
Return: 468%
Stop Limit: $7.50

Action:  We had to profile this trade one last time and it will certainly be the first trade inducted in our MomentumOptionsTrading.com’s “Ring of Fame”.  We were able to pick this one with uncanny accuracy as we gave explicit details on how to execute the trading plan.

We did leave some money on the table and I should have told everyone to close into strength on Tuesday in the 1pm update but I was just as giddy as ‘yawl.  We knew before the market opened yesterday that there would be a good chance the $7.50 stop would be hit and the sell-off should have been expected after the $30 pop on Tuesday. 

The call options did hit a high of $12 and many of you wrote to say you got out at much higher prices which is cool.  Everybody will have different results for different trades and we are glad this one was a windfall.  Just remember this tip in the future when you are trying to “max” out your trades.  And look at where they are now.  NEW option traders are still holding the calls in hopes of the stock going back above $200 and it could… 

But by taking the emotion out of the trade and walking away with the returns that you did, who cares what it does?  Think of the added risk you take by holding these calls because technically they are worthless with the stock below $200.  The price you see quoted is all time premium. 

We left half open because the bulls have being aggressive this week but we made sure we didn’t lose focus of the big picture.  It would have been great to have kept riding this wave but it fizzled.  This is where you develop discipline.  Appreciate your returns and remember you can NEVER go broke taking a profit.

Apollo Group (APOL, $54.70, up $0.19)

December 50 puts (OAQXJ, $1.75, down $0.10)

Entry Price:  $1.45 (11/5/09)
Exit Target: $2.90
Return: 21%
Stop Limit:  $1.00

Action:  As strong as the market has been this week we have not felt nervous at all holding this put position.  The stock is now bumping up to prior support but the trend is still down.

Dendreon (DNDN, $29.63, up $0.26)

January 35 calls (UQBAT, $1.50, up $0.05)

Entry Price: $2.15 (10/15/09)
Exit Target: $5.00  
Return: -30%
Stop Limit: None

Action:  Keep an eye on $30.42.  The stock reached this exact high on September 22nd and October 16th.  This is what is known on the charts as a “double top” and if we can get through this level then we could see some momentum come in.  Notice the trade was profiled on 10/15, a day before that last high.  We thought we would have a “breakout” but we failed to break through.  

The good news is we went way out with the options to but us some extra time in case we did fail the 52-week high of $30.42. 

Dendreon is still our favorite take-over target. 

The company announced earnings after the bell last night…a loss of $46 million, or $0.40 a share.  Revenue fell fractionally to $25,000 from $26,000 but we weren’t worried about the earnings.  The loss was slightly more than the expected $0.21 a share Wall Street had penciled in and revenues of $580,000 certainly weren’t met. 

The problem was the one-time $20 million charge the company took for the warrants it had to cover.  That’s another story  but this trade is based on take-over talk not the financials.

Shares were down a little in after-hours trading last night to $28 and change but should hold up.  Shares might trade lower at the open but let’s watch this $30.42 level and see if the stock can rebound.


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