9:00am (EST)

CBOE Holdings (CBOE, $24.92, up $0.05)

December 25 calls (CBOE101218C00025000, $0.95, down $0.05)

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: 27%

Stop Target: None

Action:  Continue to hold.

 

Juniper Networks (JNPR, $34.20, up $0.01)

December 35 calls (JNPR101218C00035000, $1.10, up $0.05)

Entry Price:  $1.05 (11/8/10)

Exit Target: $2.10+

Return: 5%

Stop Target: None

 

November 33 calls (JNPR101120C00033000, $1.70, up $0.10) 

Entry Price:  $1.19 (10/13/10)

Exit Target: $2.00+ (closed half at $1.65 on 11/8/10)

Return: 49%

Stop Target: $1.25 (HARD STOP)  

Action:  The November calls traded to a low of $1.37 yesterday so our HARD STOP on the other half was not hit.  There was a ton of options activity in the front-month call options across the board which is why we left the other half open despite the calls trading ABOVE our exit target of $2.00. 

The November calls touched $2.10 yesterday but there were over 10,000 contracts that traded in the 35 and 36 strikes, together, which is telling us traders are expecting a move higher. 

The December options will allow us to also enjoy further gains should shares continue higher.

 

Darden Restaurants (DRI, $47.37, down $0.66)

December 49 calls (DRI101218C00049000, $0.95, down $0.25)

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+

Return: -21%

Stop Target: 60 cents

Action:  We are looking for Darden to make a push above $50 over the next 6 weeks.

 

Aruba Networks (ARUN, $22.70, down $0.45)

January (2011) 25 calls (ARUN110122C00025000, $1.20, down $0.25)

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: 0%

Stop Target: 90 cents

Action:  Continue to hold.

 

PowerShares QQQ (QQQQ, $53.45, down $0.29)

January 53 calls (QQQQ110122C00053000, $2.00, down $0.15) 

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 30%

Stop Target: $1.50

Action:  Continue to hold. 

 

American Tower (AMT, $52.19, down $0.18) 

April (2011) 60 calls (AMT110416C00060000, $0.85, down $0.05)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return: 31%

Stop Target: None

Action:  Shares of American Tower hit a 52-week high of $53.08 while the call options kissed $1.  Continue to hold.


Chesapeake Energy (CHK, $23.06, up $0.36)

January (2011) 25 calls (CHK110122C00025000, $0.60, up $0.10)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -48%

Stop Target: None

Action:  Chesapeake got a nice lift yesterday and traded up to $23.62.  For those of you not in the trade, now is the time.  Continue to hold.     


Dendreon (DNDN, $33.84, down $0.39) (COVERED CALL)

Entry Price:  $41.96 (9/13/10) sold October 45 call @ $1.30
Exit Target: $45
Return: -17%
Stop Target: None

Action:  Shares of Dendreon have been getting hit lately which is why we made this trade a covered call.  The company recently reported earnings and their revenue numbers missed expectations.  This issue should be resolved once the company gets its manufacturing capabilities up to full-strength.

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 but we may BUY longer-term call options if the stock trades down to $30 and holds.

The company still remains a buyout target and if shares get any cheaper we expect to hear takeover chatter.


TiVo (TIVO, $9.60, down $1.69)

November 12 calls (TIVO101120C00012000, $0.10, down $0.30)

Entry Price:  $0.50 (8/17/10)
Exit Target: $1.00+
Return: -80%
Stop Target: None

Action:  Although there was no real verdict yesterday, TiVo shares sank 15%after 9 judges overheard the company’s claims on patent infringement.  The word is that 5 of them were “skeptical” on TiVo’s claims which is what worried Wall Street.

We clearly felt EchoStar’s Dish Network has been violating TiVo’s patent for “Time Warp” software that allows users to record one TV program while watching another and the case in not over.

The extended legal battle has hurt TiVo’s ability to profit from its patents and it’s hard to say what happens from here but we may as well hold the options. 

A 10 contract trade was $500 we like to remind traders that we don’t “overtrade” our accounts.  We always try to teach traders to invest the same dollar amount or buy the same number of contracts (5 or 10 contracts) for each trade so that you don’t get too high or too low with your emotions.

Yes, we are disappointed because after 3 months of waiting this was not the news we have been expecting to hear.  However, keep in mind that this was a “cheap” out-of-the-money call option that would have and still can explode if TiVo gets a win.  The problem is we may run out of time.

We play these “cheap” out-of-the-money trades because the returns can hit 500% or more which allows us to take these kinds of risks.  A 10 contract trade on a 50 cent option is $500.  On a $10,000 account it represents 5% of your overall portfolio.  Sometimes they work, sometimes they don’t.

Given the fact that anything can happen between now and November 20, it makes sense to keep the position open.


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 (strangle trade 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, $85.30, down $0.56)

December 90 calls (MMM101218C00090000, $0.45, down $0.15)

April 95 call (MMM110416C00095000, $1.00, down $0.20) 

Action:  Continue to watch. 


BMC Software (BMC, $46.01, down $0.33)

December 50 calls (BMC101218C00050000, $0.90, down $0.10)

Action:  BMC continues to be a rumored buyout target.  


Riverbed Technology (RVBD, $28.88, down $0.75)

December 35 calls (RVBD101120C00060000, $0.30, down $0.15)

Action:  Watch for now.