9:15am (EST)

FedEx (FDX, $83.71, down $1.55)

December 90 calls (FDXLR, $1.15, down $0.30)

Entry Price:  $1.40 (11/17/09)  
Exit Target: $2.80 
Return: -18%
Stop Limit: 70 cents    

Action:  There was no specific news concerning FedEx yesterday.  The stock got caught up in a lousy tape and traded lower for most of the session.  The calls traded to a low of $1.00 and we have a stop limit of 70 cents in place.  FedEx should rally with the market if the bulls continue their winning ways but the stop protects us if shares fall further.


Colgate-Palmolive (CL, $85.87, up $3.03)

January 85 calls (CLAQ, $3.90, up $2.40)

Entry Price: $1.35 (11/17/09) 
Exit Target: $2.70, raise to $5+ 
Return: 189%
Stop Limit: 70 cents, raise to $2.70 AND $3.50 

Action:  Could we have TWO tigers by the tail?  We though we had one with Netflix but this stock was the tiger yesterday.  Shares of Colgate hit a record high Wednesday after Wall Street learned of a possible merger involving the company. 

The stock soared about 3pm and hit a high of $87.39 when rumors starting circulating about the possibility of a merger with British household-product maker Reckitt Benckiser Group.

The breakdown is that Reckitt is looking at a multi-billion-dollar international deal, and fingers are pointing at Colgate as the most likely candidate.

The call options traded to a high of $4.20 which easily smashed through our $2.70 target.  Naturally, we didn’t expect a 200% gain in 48 hours with this one so this level will now become the NEW stop limit to lock in a 100%+ return.  Also, notice the $3.50 stop as well.  If this level is penetrated, then we will close half of the trade.

If the rumors turn out to be false or if the stock fades back down to previous highs then we will close the trade.  We really don’t think that will be the case because momentum is behind the shares.  However, we are also protecting our profits and we don’t want to give back these terrific gains.


Microsoft (MSFT, $30.11, up $0.11)

December 30 calls (MSQLF, $0.87, up $0.07) 

Entry Price:  $0.65 (11/16/09)
Exit Target: $1.30
Return: 34%

Stop Limit:  NO STOP

Action:  Microsoft held up well yesterday and it appears trader are “rolling” their positions out.  The 30 strike price will be a battle through Friday because it is option expiration week but nearly 10,000 of these options traded hands yesterday compared to 2,000 for the December 30 puts (MSQXF, $0.77, down $0.04).  That is a 5-to-1 ratio and is normally a bullish sign when looking for further upside price movement.


Netflix (NFLX, $61.13, up $0.38)

December 65 calls (QNQLM, $1.20, flat)

Entry Price:  $0.80 (11/13/09)
Exit Target: $1.60+
Return: 50%
Stop Limit:  NO STOP

2010 June 80 calls (QNQFP, $2.25, up $0.15)

Entry Price:  $1.65 (11/13/09)
Exit Target: $3.30++
Return: 36%

Stop Limit: NO STOP

Action:  Netflix managed to hit another 52-week high on when it printed $61.65 but still managed to close at a new high.  Impressive.


Dendreon (DNDN, $28.73, down $0.66)

2010 January 35 calls (UQBAT, $1.10, down $0.10)

Entry Price: $2.15 (10/15/09)
Exit Target: $5.00  
Return: -49%

Stop Limit: NO STOP

Action:  Continue to hold.