October 2010 | Members

 

Please remember, ALL “Exit Targets” and “Stop Targets” are targets.  You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless we list one.  We will send out an “Alert” or “Trade Update” if we want you to close a position OR if a new trade comes out.  Otherwise, follow instructions at all times in the 9am and 1pm updates.  Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames but it is rare that we do.

12:50pm (EST)

PowerShares QQQ (QQQQ, $52.35, up $0.05)

January 53 calls (QQQQ110122C00053000, $1.70, flat)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 10%

Stop Target: 75 cents

Action:  We are expecting the QQQ’s to push $55-$56 by the end of the year which would be a double on anything over $56.  Continue to hold. 

 

American Tower (AMT, $51.65, down $0.09) 

April (2011) 60 calls (AMT110416C00060000, $0.85, flat) 

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return: 31%

Stop Target: None

Action:  The company announces earnings on Monday and we are expecting a good quarter.  Continue to hold.     


Biodel (BIOD, $3.76, up $0.38) (Strangle Trade)

November 7.50 calls (BIOD101120C00007500, $0.60, up $0.05) 

Entry Price:  $0.60 (10/18/10)

Exit Target: $1.20+

Return: 0%

Stop Target: None


November 2.50 puts (BIOD101120P00002500, $0.65, down $0.05)

Entry Price:  $0.50 (10/18/10)

Exit Target: $1.00

Return: 30%

Stop Target: None


March (2011) 7.50 calls (BIOD110319C00007500, $0.90, up $0.10) 

Entry Price:  $1.10 (10/18/10)

Exit Target: $2.20+

Return: -18%

Stop Target: None  

Action:  We might not get news until after the closing bell.  Continue to hold. 


Juniper Networks (JNPR, $32.35, up $0.56)

November 33 calls (JNPR101120C00033000, $0.70, up $0.20)


Entry Price:  $1.19 (10/13/10)

Exit Target: $2.00+

Return: -41%

Stop Target: None

Action:  The 52-week high is $32.84 and shares look poised to clear this level soon, if not today.  Continue to hold. 


Brocade Communications Systems (BRCD, $6.39, up $0.23)

January (2011) 6 calls (BRCD110122C00006000, $0.70, up $0.10)

Entry Price:  $0.40 (10/13/10)

Exit Target: $1.00+

Return: 75%

Stop Target: None


April (2011) 6 calls (BRCD110416C00006000, $0.90, up $0.15)

Entry Price:  $0.60 (10/13/10)

Exit Target: $1.20+

Return: 50%

Stop Target: None

Action:  Shares are up 4% today and the call options are rocking.  Continue to hold.


Chesapeake Energy (CHK, $21.57, up $0.24)

January (2011) 25 calls (CHK110122C00025000, $0.35, up $0.05)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -70%

Stop Target: None

Action:  Continue to hold.      


Dendreon (DNDN, $36.91, down $0.03) (COVERED CALL)

Entry Price:  $41.96 (9/13/10) sold October 45 call @ $1.30
Exit Target: $45
Return: -9%
Stop Target: None

Action:  We are watching the January calls but want shares to move past $40 before we sell another covered call.

Dendreon opened at $41.96 and you could have sold the October 45 call option for $1.30 on 9/13/10.  This lowered the cost basis to $40.66. 


TiVo (TIVO, $11.15, up $0.03)

November 12 calls (TIVO101120C00012000, $0.45, flat)

Entry Price:  $0.50 (8/17/10)
Exit Target: $1.00+
Return: -10%
Stop Target: None

Action:  Big news coming by 11/9.  New subscribers, read this week’s notes.  Continue to hold.


Other 2010 Portfolio OPEN positions (1):  These are trades that are still open in the portfolio that have longer expiration dates or are on “hold” but are not worth mentioning until they turn around.  We are still keeping track of the trade and we will record the results, accordingly, when we close them or the options expire.  Click on the 2010 Portfolio link in the Members Area to view ALL open/ closed trades. 

Intel November 18 puts (from October) (Strangle Trade, call options closed for 42% profit)


WATCH LIST SECTION 

These trades are NOT recommendations until we send out an alert.  These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices.  We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.


Halliburton (HAL, $31.62, down $0.06)

November 30 puts (HAL101120P00030000, $0.85, flat)

Action:  These options soared over 500% yesterday after OPENING at 13 cents.  The puts traded to a high of $2.46 which represented a gain of 1,650% from the open to the high.  If shares do test the mid-$20’s then these put will catch fire again.

 

3M Company (MMM, $84.58, down $0.49)

April 95 call (MMM110416C00095000, $1.20, down $0.05)

Action:  Yesterday’s 6% drop smells like a buying opportunity. 


Deckers Outdoor (DECK, $58.08, up $0.49) 

November 60 calls (DECK101120C00060000, $1.60, up $0.35)

Action:  We said if we had to play one earnings trade this week it would be this one.  The calls opened at 60 cents on Monday and traded down to 95 cents yesterday.   They have trade as high as $1.80 today and we would lock up profits on at least half if you are in the trade.


Dish Network (DISH, $19.75, up $0.04)

November 19 puts (101120P00019000, $0.60, flat)

Action:  Watch for now.


Genworth Financial (GNW, $11.24, down $1.34)

November 14 calls (GNW101120C00014000, $0.05, down $0.20)

November 13 puts (GNW101120P00013000, $2.00, up $1.10)

Action:  The strangle trade more than double.  From this morning:

“We knew this strangle trade had a good shot at being a winner.  The puts opened at 54 cents while the calls started at 35 cents on Wednesday.  The total cost would have been about 90 cents, or $90, to buy one contract of each option.

Yesterday, the stock dropped 5% which was a prelude because shares dropped another 5% in after-hours last night after the company reported earnings.  We will go over the trade one last time when we get some numbers at the open in our 1pm update.  At current prices, the trade is up nearly 28% as the position has a value of $125 but we expect the put options will get a nice pop again today.” 


BMC Software (BMC, $45.76, up $1.79)

November 50 calls (BMC101120C00050000, $0.40, flat)

Action:  Not much love today but they could do well over the next few weeks.


Riverbed Technology (RVBD, $57.74, up $1.15)

November 60 calls (RVBD101120C00060000, $1.55, up $0.10)

Action:  We are trying to get into some longer-term options on this trade and we may wait until after the stock split.


Aruba Networks (ARUN, $21.73, up $0.24)

December 22 calls (ARUN101218C00022000, $1.50, up $0.05)

April 30 calls (ARUN110416C00030000, $0.75, flat)

Action:  Watch for now. 

 ]]>