December 2009 | Members



1:10pm (EST)


DryShips (DRYS, $6.28, up $0.16)

Entry Price:  $6.21 (11/30/09)
Exit Target: $7.21
Return: 2%
Stop Limit: $5.21

Action:  The upgrade in the steel sector should keep dry-bulk shipping rates steady.  The stock is making a nice move today, up 2.6%. 

TiVo (TIVO, $9.96, up $0.06)

February 12.50 calls (TUKBV, $0.77, up $0.02)

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

Return: 0%
Stop Limit: None

Action: The calls traded as high as 85 cents this morning as shares of TiVo traded over $10 earlier this morning.  The most active options are the February 10 calls (TUKBB, $1.55) which have traded nearly 1,500 contracts today.  Continue to hold.

American International Group (AIG, $31.73, up $3.33)

December 25 puts (AIGXY, $0.62, down $0.66)

Entry Price:  $0.97 (11/30/09)
Exit Target: closed half at $1.48 on 11/30, half at $1.05 today

Return: 30%

Stop (Limit): $0.75

Action:  We knew the open would be tricky and it is often a nightmare for new option traders.  We told you AIG was up in pre-market trading and that if you had an stop order placed it would probably get hit.  Our stop was 75 cents but we were trying to get out at higher prices.

The puts traded to a low 66 cents when the opening bell sounded but were at $1.00-$1.05 about 5 minutes after the open.  The other half should have been closed as we said we were trying out at higher prices.

The stock has been strong all day and is at session highs as we prepare to send this update out.  The 75 cents stop still represented a 10% profit but we were able to squeeze 30% out of the trade.

Many of you wrote us last night and said you closed the entire trade for 40%-50% profits.  Sweet, you are learning.

We are still in a trader’s market and it will be important for us to take quicker profits.  There will be another trade for AIG and we are tempted to jump back in here at these levels.  However, we will wait for things to settle down a bit.  We need to see where AIG closes and if it runs back up to $35.

If shares rally to $35-$36, we may look at some January put options.