December 2009 | Members

 

 

 

2:00pm (EST)

Folks, we have decided to add American Sierra Gold (AMNP, $0.89, up $0.08) to our stock portfolio.  The average daily volume is over 2 million shares traded so it is plenty liquid.  The 52-week high is $1.47 while the low is 70 cents.

This is a speculative play on gold and we will update the position in Thursday’s update.


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1:10pm (EST)

 

 

Aeropostale (ARO, $32.50, up $0.27)

December 35 calls (AQOLG, $0.60, up $0.05)

Entry Price:  $0.65 (12/02/09)
Exit Target: $1.30
Return: -8%
Stop Limit: None

Action:  This is an earnings trade so it wouldn’t make sense to list a stop.  We either hit the ball out of the park or we strike out.  We aren’t a big fan of retail but some names in the sector are showing strength. 


A123 Systems (AONE, $17.22, up $0.50)

January 20 calls (ZKQAD, $0.65, up $0.05)

Entry Price:  $0.65 (12/02/09)
Exit Target: $1.30
Return: 0%
Stop Limit: None

Action:  We normally follow 50% loss guideline rules but these two trades are different in that one is an earnings play while this one is an “IPO” play.

A123 made its debut back in late September so it really doesn’t have a “reliable” chart.  We initially wanted to list this trade as a straddle or a strangle option play but we are leaning towards the stock making a push back to $20 over the near-term.


DryShips (DRYS, $6.28, down $0.04)

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

Action:  Continue to hold. 


TiVo (TIVO, $9.96, down $0.04)

February 12.50 calls (TUKBV, $0.75, down $0.02)

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

Return: 0%
Stop Limit: None

Action:  Continue to hold.

 

Important Note:  This is NOT an official trade (yet)…

We are also watching Goldman Sachs (GS, $165.82, down $1.81) closely but we feel a little uneasy shorting such a strong company.  However, we are watching the $165 level closely and a break below this level could lead to further weakness. 

We have been looking at the December 160 puts (GPYXL, $1.92, up $0.33) and the January 150 puts (GPYMJ, $2.50, up $0.14) all morning but feel like a deer in headlights.  If the stock breaks below $165 we will add the January 150 puts.

 

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12:00pm (EST)

Folks, we are working on the 1pm update but we wanted to send our trades out early while Wall Street is at lunch…

NEW TRADES!!!

Aeropostale (ARO, $32.79, up $0.56)

Buy to OPEN ARO December 35 calls (AQOLG, $0.65, up $0.10)

Action:  Set limit prices at 70 cents and if you get this late try do not pay more than 75-80 cents for these options.

The company will report earnings after the bell today and Wall Street is expecting 91 cents a share on revenue of $565 million.  We think there is a strong possibility of the company beating those estimates.

Aeropostale raised guidance for the quarter to 90-91 cents from 84-85 cents after reporting nearly a 20% jump in September same-store sales.  The risk in this trade is that they say something negative or they miss earnings.

We doubt the company raised the bar too high and probably sandbagged a few pennies.  There are whispers numbers of the company reporting 93-94 cents floating around which would be a bonus.

Important, if by chance you get in at either of the aforementioned entry prices, please remember this is an earnings trade and they are unpredictable.  It’s like betting on little on black numbers and a little on red numbers but getting the green numbers in roulette.  No matter how much “homework” you do, there is the element of surprise.  We would also only do “half” positions which means if you normally do 10 contracts, do 5.

Important… if by 3:59pm you are up over 40%, we would close the trade if you feel uneasy about giving up those types of returns.


A123 Systems (AONE, $16.99, up $0.15)

Buy to OPEN AONE January 20 calls (ZKQAD, $0.60, unchanged)

Action:  The current bid is 50 cents and the ask is 70 cents.  Set limit prices at 65 cents and we should get filled.

The December 17.50 calls (ZKQLW, $0.80, up $0.15) are active but we want a little more time in case the stock stalls from here.

 

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9:00am (EST)

DryShips (DRYS, $6.32, up $0.20)

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

Action:  Continue to hold. 


TiVo (TIVO, $10.00, up $0.10)

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

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

Return: 3%
Stop Limit: None 

Action:  Continue to hold.