9:10am (EST)


DryShips (DRYS, $6.12, down $0.07)

Entry Price:  $6.21 (11/30/09)
Exit Target: $7.21
Return: -1%
Stop Limit: $5.21

Action:  Hold.

TiVo (TIVO, $9.90, down $0.08)

February 12.50 calls (TUKBV, $0.75, unchanged)

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

Return: 0%
Stop Limit: None

Action:  Volume was brisk yesterday in these call options as nearly 6,800 contracts traded hands.  They were by far the most active in the options chain and the calls dipped to a low of 68 cents.

TiVo fought back in the afternoon session and the current “Ask” for the option is 85 cents.  There may be resistance at $10 for a bit but once we break through this level we can see a pop back to $11+.  Also, any favorable court ruling between now and February will be a huge bonus.

American International Group (AIG, $28.40, down $4.90)

December 25 puts (AIGXY, $1.28, up $1.07)

Entry Price:  $0.97 (11/30/09)
Exit Target: $2.00

Return: 42% (closed half at $1.48)
Stop (Limit): $0.75 (on other half)

Action:  We jumped on the AIG gravy train a little late but most of you wrote us last night and thanked us for the quick trade.  The puts traded to a high of $1.52 yesterday and we sent out an alert shortly after 3pm yesterday. 

We have set a stop of 75 cents on the other half.

We would like to see more weakness in AIG today which is why we left a some on the table.  However, we are also aware that shares could rebound a little following yesterday’s steep selloff and that we might not make as much of a return compared to if we had closed the entire trade.  Some of you did close the entire trade which is great.

In pre-market trading, the stock is up $1.80 to $30.20 so these put options will open lower this morning.  Here is the tricky part.

The stop is 75 cents but since we sold half at $1.48 we have a little wiggle room.  You can make this a “loose” stop and if the put options open higher than 75 cents then you can close the other half for a small profit. 

If the options open lower than 75 cents then we may have to wait until AFTER the open to see if we can get better prices.  We know many of you can’t watch the opening bell but we would not place sell orders on the other half.  We will update the position at 1pm.