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.

 12:10pm (EST)

Juniper Networks (JNPR, $34.26, up $1.15)

January 35 calls (JNPR110122C00035000, $1.70, up $0.50)

Entry Price:  $1.30 (11/17/10)

Exit Target: $2.60

Return: 31%

Stop Target: 65 cents

Action:  Looking good in the Juniper neighborhood.  Continue to hold.


Riverbed Technology (RVBD, $30.54, up $1.53)

March 35 calls (RVBD110319C00035000, $2.15, up $0.75)

Entry Price:  $1.40 (11/17/10)

Exit Target: $2.80

Return: 54%

Stop Target: None (see notes) 

Action:  Shares have hit a high of $31.10 today.  Continue to hold.


CBOE Holdings (CBOE, $24.64, up $0.24)

December 25 calls (CBOE101218C00025000, $0.75, up $0.05)

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: 0%

Stop Target: None

Action:  We are looking for a break above $25 and a run to $27-$28.  Continue to hold.


Darden Restaurants (DRI, $48.91, down $0.11)

December 49 calls (DRI101218C00049000, $1.55, flat)

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+

Return: 29%

Stop Target: $1.25

Action:  We are looking for a push past $50, up to $55.  Continue to hold.


Aruba Networks (ARUN, $23.03, up $1.71)

January (2011) 25 calls (ARUN110122C00025000, $1.15, up $0.30)

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -4%

Stop Target:  60 cents

Action:  The calls have traded up to $1.20 today as shares have hit a high of $23.73.  Continue to hold.


PowerShares QQQ (QQQQ, $52.74, up $1.14)

January 53 calls (QQQQ110122C00053000, $1.50, up $0.40)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: -3%

Stop Target: 75 cents

Action:  Continue to hold.


American Tower (AMT, $51.75, up $0.71)

April (2011) 60 calls (AMT110416C00060000, $0.75, up $0.10)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  15%

Stop Target: None

Action:  Continue to hold.


Chesapeake Energy (CHK, $22.28, up $0.18)

January (2011) 25 calls (CHK110122C00025000, $0.40, flat)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -65%

Stop Target: None

Action:  Continue to hold.


Dendreon (DNDN, $38.49, up $2.62) (COVERED CALL)

December 40 call (DNDN101218C00040000, $1.20, flat)

Entry Price:  $41.96 (9/13/10) sold October 45 call @ $1.30, (11/11/10)

sold December call @$1.75

Exit Target: $45

Return: -1%

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.

On 11/11/10 we sold the December 40 call option for $1.75 which lowered our cost basis to $38.91.  If the stock gets “called away” from us by mid-December then we make 3% in 3 months.


Other 2010 Portfolio OPEN positions (3):  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)

TiVo November 12 calls (from August)


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.


Cisco Systems (CSCO, $19.71, up $0.30)

Action:  We are looking at Cisco as a covered call trade.


Foster Wheeler (FWLT, $28.63, up $1.24)

January 30 calls (FWLT110122C00030000, $1.35, up $0.45)

Action:  We knew a bounce was coming but we will wait until next week to add new trades once we have a few from November clear the board.


Ingersoll-Rand (IR, $41.48, up $0.59)

January 45 calls (IR110122C00045000, $0.60, up $0.10)

Action:  We like these options at current levels but we will wait.


JDS Uniphase (JDSU, $11.83, up $0.33)

March 13 calls (JDSU110319C00013000, $0.75, up $0.10)

Action:  Watch for now.

9:00am

Juniper Networks (JNPR, $33.11, down $0.55)

January 35 calls (JNPR110122C00035000, $1.20, down $0.25)

Entry Price:  $1.30 (11/17/10)

Exit Target: $2.60

Return: -8%

Stop Target: 65 cents

Action:  These calls traded to a low of $1.18 so some of you may have gotten better entry prices.  We think Juniper has a chance to run to $40.

 

Riverbed Technology (RVBD, $29.01, up $1.19)

March 35 calls (RVBD110319C00035000, $1.40, down $0.40)

Entry Price:  $1.40 (11/17/10)

Exit Target: $2.80

Return: 0%

Stop Target: None (see notes) 

Action:  The “ask” came down enough to where our limit prices of $1.40 were hit.  The March options have 149 days before expiration and we like this name a lot.

This position reminds us a lot of Netflix (NFLX, $166.68, up $1.28) and we want to tell a story today…

About this time last year, we recommended a trade in Netflix when shares were right near $60.  We recommended a June 80 call that was $20 out-of-the-money and the trade was slightly up going into Black Friday (which is next week) and the market went on a hell of a ride, so did the stock.

We had listed a tight stop which changed our philosophy a little because we were stopped out of a really good trade.  The thing is, we had this feeling that Neflix was going to double because they were everywhere and growing like a weed and Blockbuster was a walking zombie.  Riverbed reminds us a lot of Neflix, different sector, but a dominate player.

To make a long story short, we recommended the Netflix trade at $1.65 and it was stopped out at $1.25 when shares traded to a low of $54 on that Friday after Thanksgiving.  If we had stuck to our instincts and followed our research (we are fundamental freaks, too) then we would have just left the trade open but we were also in some December options that were stopped out which triggered the stop in the June options. 

Neflix was at $120 this past June and those options were at $40.  In other words, a 10 contract trade that cost $1,650 could have pulled in $40,000 had we left it open.

We aren’t sure if Riverbed will match that performance and we aren’t sure if the trade will even be profitable if the market goes to pot but we intend to ride this trade until March…good, bad, or ugly, which is why there is no stop.

The other part of the story was to remind you that things could get volatile in the market.  On Black Friday, 2009, the Dow fell nearly 300 points in a half session and traded in a range of 10,454-10,179 before finishing 150 points down.  The index hit a low of 10,207 by the second week of December before touching 10,600 by year-end and then 10,763 by mid-January 2010.

And here we are now.  Just remember this if things get volatile.  We may be looking at the same exact ride for the market and Riverbed but don’t flinch!

 

CBOE Holdings (CBOE, $24.40, down $0.20)

December 25 calls (CBOE101218C00025000, $0.70, down $0.10)

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: -7%

Stop Target: None

Action:  We are looking for a break above $25 and a run to $27-$28.  Continue to hold.

 

Darden Restaurants (DRI, $49.02, up $1.45)

December 49 calls (DRI101218C00049000, $1.55, up $0.55)

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+

Return: 29%

Stop Target: $1.25

Action:  The 52-wek high is $49.61 and shares touched $49.12 yesterday.  We are looking for a push past $50, up to $55.  Continue to hold.

 

Aruba Networks (ARUN, $21.32, down $0.03)

January (2011) 25 calls (ARUN110122C00025000, $0.85, up $0.05)

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -29%

Stop Target:  60 cents

Action:  Aruba beat by a penny. Shares are above $22 in early action.

 

PowerShares QQQ (QQQQ, $51.60, up $0.15)

January 53 calls (QQQQ110122C00053000, $1.10, flat)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: -29%

Stop Target: 75 cents

Action:  Continue to hold.

 

American Tower (AMT, $51.04, up $0.50)

April (2011) 60 calls (AMT110416C00060000, $0.65, flat)

 

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  0%

Stop Target: NoneAction:  Continue to hold.

  

Chesapeake Energy (CHK, $22.10, up $0.14)January (2011) 25 calls (CHK110122C00025000, $0.40, up $0.05)

 

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -65%

Stop Target: None

 

Action:  Continue to hold.

  

Dendreon (DNDN, $35.87, flat) (COVERED CALL)

 December 40 call (DNDN101218C00040000, $1.20, flat)


Entry Price:  $41.96 (9/13/10) sold October 45 call @ $1.30, (11/11/10)

sold December call @$1.75

Exit Target: $45

Return: -8%

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.


On 11/11/10 we sold the December 40 call option for $1.75 which lowered our cost basis to $38.91.  If the stock gets “called away” from us by mid-December then we make 3% in 3 months.

 

Other 2010 Portfolio OPEN positions (3):  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)

TiVo November 12 calls (from August)

 

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.

 

Cisco Systems (CSCO, $19.41, down $0.03)

Action:  We are looking at Cisco as a covered call trade.

 

Foster Wheeler (FWLT, $27.39, up $0.13)

January 30 calls (FWLT110122C00030000, $0.90, up $0.05)

Action:  Watch for now.

 

Ingersoll-Rand (IR, $40.89, down $0.53)

January 45 calls (IR110122C00045000, $0.50, down $0.10)

Action:  Watch for now.

 

JDS Uniphase (JDSU, $11.50, up $0.10)

March 13 calls (JDSU110319C00013000, $0.65, flat)

Action:  Watch for now.

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