November 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.

12:40pm (EST)

NEW TRADES!!!

CBOE Holdings (CBOE, $24.45, down $0.20)

Buy to OPEN December 25 calls (CBOE101218C00025000, $0.75, down $0.15)

Action:  We did a video last night for our course members covering this trade in more detail but the bottom line is we like it.  The stock looks like it is going to test $26 and possibly $28 over the next few weeks.  Use limit orders of 75-80 cents but do not pay over 85-90 cents for them.

 

Juniper Networks (JNPR, $34.25, down $0.14)

Buy to OPEN December 35 calls (JNPR101218C00035000, $1.05, down $0.20)

Action:  Use limit orders of $1.00-$1.15 but do not pay more than $1.20-$1.25 for these options.  We are going to “roll-over” positions from our November trade to take advantage of the stock’s momentum.

 

Darden Restaurants (DRI, $48.21, up $0.02)

Buy to OPEN December 49 calls (DRI101218C00049000, $1.20, flat)

Action:  Use limit prices of $1.00-$1.30 but do not pay over $1.40 for the calls.  The 52-week high for the stock is $49 and a break above this level leads to all-time highs or “blue-sky” territory.  If the stock can make it to $51.50 by mid-December the trade would represent a 100+% return as the calls would be worth at least $2.50.

 

CURRENT TRADES

Aruba Networks (ARUN, $23.09, down $0.04)

January (2011) 25 calls (ARUN110122C00025000, $1.40, down $0.05)  

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: 17%

Stop Target: 90 cents

Action:  Continue to hold.


PowerShares QQQ (QQQQ, $53.75, up $0.07)

January 53 calls (QQQQ110122C00053000, $2.20, flat)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 43%

Stop Target: $1.50

Action:  Continue to hold. 

 

American Tower (AMT, $52.14, up $0.22) 

April (2011) 60 calls (AMT110416C00060000, $0.80, flat)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return: 23%

Stop Target: None

Action:  Continue to hold.


Juniper Networks (JNPR, $34.25, down $0.14)

November 33 calls (JNPR101120C00033000, $1.65, down $0.10) 

Entry Price:  $1.19 (10/13/10)

Exit Target: $2.00+

Return: 39%

Stop Target: $1.25 (HARD STOP)  

Action:  CLOSE HALF THE TRADE AT CURRENT LEVELS.

The calls have only made a high of $1.73 this morning so let’s close half at current levels and we will leave the hard stop of $1.25 on the other half.  If shares continue higher then we will enjoy further gains while protecting profits.


Brocade Communications Systems (BRCD, $6.01, down $0.05)

April (2011) 6 calls (BRCD110416C00006000, $0.75, down $0.02)

Entry Price:  $0.60 (10/13/10)

Exit Target: $1.20+ (closed at 70 cents on 11/8/10)

Return: 17%

Stop Target: 70 cents (HARD STOP)

Action:  We were stopped out of this trade at 70 cents as the option hit a low of 64 cents this morning.  We still like the position longer-term and we may be able to get back into this one at lower prices.  However, the momentum has faded and we booked profits to use for new trades.  This trade made 17% while the January trade made 50%.


Chesapeake Energy (CHK, $22.58, up $0.31)

January (2011) 25 calls (CHK110122C00025000, $0.50, up $0.10)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -57%

Stop Target: None

Action:  These options have 74 days before expiration which is plenty of time for this trade to play out.  Continue to hold.     


Dendreon (DNDN, $34.22, down $0.85) (COVERED CALL)

Entry Price:  $41.96 (9/13/10) sold October 45 call @ $1.30
Exit Target: $45
Return: -16%
Stop Target: None

Action:  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.  We are looking to sell another call option. 


TiVo (TIVO, $11.18, up $0.02)

November 12 calls (TIVO101120C00012000, $0.35, flat)

Entry Price:  $0.50 (8/17/10)
Exit Target: $1.00+
Return: -30%
Stop Target: None 

Action:  Continue to hold.


Other 2010 Portfolio OPEN positions (2):  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) 

Biodel March 7.50 calls (from October) 


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. 

3M Company (MMM, $86.37, up $0.03)

December 90 calls (MMM101218C00090000, $0.70, flat)

April 95 call (MMM110416C00095000, $1.35, flat)

Action:  Continue to watch. 


Dish Network (DISH, $20.21, down $0.60)

November 19 puts (101120P00019000, $0.25, up $0.15) 

Action:  Dish may have to pay TiVo up to $2 billion on a litigation settlement and they report earnings today.    


BMC Software (BMC, $46.18, up $0.01)

December 50 calls (BMC101218C00050000, $0.95, flat) 

Action:  BMC continues to be a rumored buyout target.  


Riverbed Technology (RVBD, $59.76, up $0.48)

December 65 calls (RVBD101120C00060000, $1.90, up $0.20)

Action:  We are waiting for the split to maybe go long.  Continue to watch.