Microsoft (MSFT, $29.60, down $0.17)
December 30 calls (MSQLF, $0.56, down $0.14)
Entry Price: $0.65 (11/16/09)
Exit Target: $1.30
Return: -14% (Note: Our email said the gain was 8% but that was before the market had opened and it wasn’t corrected)
Stop Limit: 50 cents, lower to 30 cents
Action: We were getting too “cute” with our stop and it almost cost us. The calls have traded to a low of 51 cents and we are lowering our stop to the normal 50% stop loss.
The stock has traded to a low of $29.46 so we will hang in there until it falls below $28. Microsoft is going to have a SOLID quarter and we want to catch the momentum higher. We are looking for the stock to trade $31 by Christmas which would mean these call options would be worth $1, or a double from current levels.