9:00am (EST)

CURRENT TRADES (quotes are from Friday’s close)

Microsoft (MSFT, $29.62, down $0.16) 

December 30 calls (MSQLF, $0.58, down $0.12) 

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

Stop Limit:  30 cents (Note:  this morning’s email had the stop at 50 cents, we lowered it Friday)

Action:  We have learned Microsoft is in talks with News Corporation (NWS, $14.13, down $0.59) about a possible deal.  Microsoft wants to feature News Corp’s content on Bing which would mean News Corp would have to remove its newspaper content from Google’s search engine.

The talks are still at a very early stage and may not result in a deal, but you have to like Microsoft’s aggressiveness.  


Netflix (NFLX, $59.97, down $0.29)

December 65 calls (QNQLM, $0.80, down $0.20)

Entry Price:  $0.80 (11/13/09)
Exit Target: $1.60+
Return: 0%
Stop Limit:  NO STOP

2010 June 80 calls (QNQFP, $1.95, down $0.15)

Entry Price:  $1.65 (11/13/09)
Exit Target: $3.30++
Return: 18%

Stop Limit: NO STOP

Action:  We should easily pop back over $60 with today’s strong open.


Dendreon (DNDN, $28.01, down $0.04)

2010 January 35 calls (UQBAT, $0.80, down $0.10)

Entry Price: $2.15 (10/15/09)
Exit Target: $5.00  
Return: -63%

Stop Limit: NO STOP

Action:  A takeover target…these are January options and they have been down as much as 70%.  We profiled the trade on October right when the stock was making a new high and it had recently made it back to less than a 50% loss. 

For those of you just joining us, sometimes we keep position “open” with no stop because of the circumstances surrounding the company.  It is sometimes possible that these type of trades can lose as much as 90% and still end up making you 100%.  Dendreon could be such a stock.

On Friday, Dendreon said that the FDA will make a ruling on Provenge by May 1, 2010.  The drug is designed to treat men with advanced prostate cancer and if approved, it would be the first in a new class of treatment which use live human cells to activate a patient’s own immune system.

The company has said it would be able to make enough Provenge to generate potential sales of up to $125 million in the second half of next year.  Dendreon expects to ramp up production to full capacity by late 2011 to support potential annual sales of $2.5 billion.