November 2009 | Members


1:00pm (EST)


Wal-Mart Stores (WMT, $52.65, up $0.34)

November 52.50 calls (WMTKX, $0.99, up $0.19)

Entry Price:  $0.98 (11/6/09)
Exit Target: $2.00

Return: 0%
Stop Limit: None

Action:  As soon as we released the trade at 11:30am this morning these calls dropped to 80 cents or so shortly after.  It seems their CEO made some negative comments on Christmas.  Well, I don’t want to panic and he could be sandbagging.  If you decide to get out of the trade now, no worries, then do it if YOU feel unsafe holding the trade overnight.

We are going to roll the dice… (PCLN, $197.66, down $6.67) (folks, I didn’t update these quotes in the email.  These are the current and correct quotes)

November 200 calls (PNEKA, $5.00, down $4.00)

Entry Price:  $1.10 (11/6/09)
Exit Target: $10.00 (closed half at $5.00 on 11/10/09)
Return: 468%
Stop Limit: $7.50

Action:  All good things come to an end…


11:30am (EST)


Wal-Mart Stores (WMT, $52.73, up $0.41)

Buy to OPEN WMT November 52.50 calls (WMTKX, $0.98, up $0.18)

Try to get into the calls for under a $1.00 but you can go up to $1.05.  I’m not a big fan of retail and today we are getting mixed results from some of the retailers reporting earnings.  Wal-Mart is the 800-lb. gorilla of retail but its stock isn’t a big mover.  However, there is a chance for a decent 50%-100% gain on the trade if the stock can push $54-$55. 

The downside is that Wal-Mart disappoints and we fall back down to $50.  Again, I’m not of fan of retail but Wal-Mart has incredible pricing power and everybody goes there.  With the economy the way it is consumers are still searching for value and Wal-Mart is the best in the business. 

If they were to disappoint then the trade could lose 50% or more.  The company will report earnings BEFORE the bell on Thursday so we should know something in the morning.


9:05am (PCLN, $204.22, up $30.49) 

November 200 calls (PNEKA, $9.00, up $7.50)

Entry Price:  $1.10 (11/6/09)
Exit Target: $10.00 (closed half at $5.00 on 11/10/09)
Return: 536%
Stop Limit: $4, raise to $7.50

Action:  Wow.  Our jaws are still dropped…

We can’t tell you how excited we have been over the last 24 hours as many of you started writing to us at the start of yesterday’s opening bell.  The huge returns some of you have banked on this trade have been fun to read.  This was our biggest trade to date since we started and it was our pleasure to bring it to you.

I wanted to take some time to explain how the return is set up.  If you had bought 10 contracts it would have cost you $1,100.  When our update went out yesterday the calls were at $5 when we said to close half.  That gives you $2,500.  The other 5 are worth $4,500 based on yesterday’s closing price.  That gives you $7,000 off a $1,000 trade.

Now, as far as the stop limit.  Wait to see where these calls open because we can possibly ride this one for further gains.  The $7.50 stop limit can be put in place if the calls OPEN over that.  If they open lower than $7.50 then you sell them at the open OR watch how they trade for a few minutes.  Either way, don’t give back your gains if the call options continue to fall.  The stock was up in after-hours last night but is currently down a buck in pre-market trading.

Apollo Group (APOL, $54.51, down $1.37)

December 50 puts (OAQXJ, $1.85, up $0.35)

Entry Price:  $1.45 (11/5/09)
Exit Target: $2.90
Return: 28%
Stop Limit:  $1.00

Action:  Continue to hold.  These call options have 37 days before expiration and the stock continues to break down like a rented mule.  On Monday, shares made a fresh 52-week low of $52.79 and easily could trade below $50 if we get some momentum.  This trade has the potential to easily bring in a triple-digit profit if shares keep sinking. 

Dendreon (DNDN, $29.37, up $0.06)

January 35 calls (UQBAT, $1.45, down $0.05)

Entry Price: $2.15 (10/15/09)
Exit Target: $5.00  
Return: -33%
Stop Limit: None

Action: Continue to hold.  These calls have 65 days until expiration.