December 2009 | Members

 

1:30pm (EST)

Gilead Sciences (GILD, $46.72, up $0.46)

January 50 calls (GDQAJ, $0.55, up $0.10)

Entry Price:  $0.55 (12/04/09)
Exit Target: 80 cents
Return: 0%
Stop Limit: 25 cents

Action:  Hold.


A123 Systems (AONE, $17.50, down $0.35)

January 21 calls (ZKQAU, $0.65, down $0.13)

Entry Price:  $0.80 (12/04/09)
Exit Target:  $1.60  (Note, our email stated CLOSED at $1.00, we forgot to change this)
Return: -19%
Stop Limit: NONE

Action:  The call options opened at 80 cents and reached a high of $1.00 earlier this morning.  We mentioned $17.50-$17.75 looked like resistance and hopefully it has now become support which is where it rests. 

Remember there is only a 3-month history for this IPO as far as charts…


TiVo (TIVO, $9.95, up $0.11)

February 12.50 calls (TUKBV, $0.75, flat)

Entry Price:  $0.75 (11/30/09)
Exit Target: $1.50

Return: 0%
Stop Limit: None

Action:  Continue to hold. 


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11:00am (EST)

NEW TRADE!!!

Gilead Sciences (GILD, $46.82, up $0.56)

Buy to OPEN GILD January 50 calls (GDQAJ, $0.55, up $0.10)

The is a biotech play which carries added risk.  There is a tremendous amount of open interest in these call options at 18,000 contracts so we should get good fill prices if we set limits at 55-60 cents.  You can try 55 cents but you may not get filled “instantly” but either way we have a target of $1 for the options.

The stock could be setting up for a run to $50 which was last touched in July.  There is strong support at the $45-$46 level.  We might not reach our $1 target but even if we reach 80 cents it will still represent a 50% return.

 

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9:15am (EST)


A123 Systems (AONE, $17.85, up $0.09)

January 20 calls (ZKQAD, $1.00, up $0.05)

Entry Price:  $0.65 (12/02/09)
Exit Target: CLOSED at $1.00
Return: 54%
Stop Limit: 75 cents

Action:  We closed this trade yesterday in the 1pm update and we gave you the option of closing it with us or setting a stop and watching the trade into the close.  The stock hit a high of $18.60 and sure is acting like it will be over $20 soon.

However, we closed the trade ahead of today’s unemployment report to protect profits. 

We said yesterday that there is no history for this stock as it has only been trading for 3 months.  However, there are times where you can get a “feel” for the stock and it’s possible to trade it over and over again.

IMPORTANT:  We are looking at getting back into this position if the stock doesn’t zoom at the open.

BUY to OPEN the AONE January 21 calls this morning (ZKQAU, $0.78) if they open for under $1.00.  Set limit prices there but do not pay over $1.10 for the call options.



TiVo (TIVO, $9.84, down $0.19)

February 12.50 calls (TUKBV, $0.75, down $0.10)

Entry Price:  $0.75 (11/30/09)
Exit Target: $1.50

Return: 0%
Stop Limit: None

Action:  We left this trade open despite the unemployment report because the calls do not expire until February.

This is an EVENT trade which means you are in the position because you are waiting for a favorable court ruling.  That could come next week or next month or in February.

The stock could get anywhere from a 10%-20% or more if royalties are involved.  TiVo also has a nice partnership with Google (GOOG, $585.74, down $1.77) which also makes it a takeover target in multiple ways.