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.

12:05pm (EST)

CBOE Holdings (CBOE, $24.79, up $0.45)

December 25 calls (CBOE101218C00025000, $0.90, up $0.15)  

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: 20%

Stop Target: None

Action:  Continue to hold.


Darden Restaurants (DRI, $47.82, down $1.22)

December 49 calls (DRI101218C00049000, $1.10, down $0.60)

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+

Return: -8%

Stop Target: $1.25    

Action:  We didn’t think this position would be this volatile but it has been.  The stock is down 3% today but the chart is telling us break above $50 is in the cards.  Continue to hold.

 

Aruba Networks (ARUN, $20.93, down $0.66)

January (2011) 25 calls (ARUN110122C00025000, $0.80, down $0.15)

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -33%

Stop Target:  60 cents

Action:  The company reports earnings on Wednesday.  Wall Street is looking for a profit of $0.11 a share versus a year-ago earnings of $0.04 a share.  The company has beaten expectations in each of the past four quarters.  Continue to hold.


PowerShares QQQ (QQQQ, $51.44, down $0.88)

January 53 calls (QQQQ110122C00053000, $1.15, down $0.30) 

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: -25%

Stop Target: 75 cents 

Action:  This position has been volatile as you can imagine but we are not trying to day trade these options.  The trade has shown some strong gains but we are looking past the volatility which is why we went with the January options.  These options have 66 days before expiration.  Continue to hold. 

 

American Tower (AMT, $50.63, down $0.83) 

April (2011) 60 calls (AMT110416C00060000, $0.65, down $0.10)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  0%

Stop Target: None

Action:  These options have 150 days before expiration and we have also experienced some big price swings in this position.  Support is at $50.  Continue to hold.


Chesapeake Energy (CHK, $21.90, down $0.40)

January (2011) 25 calls (CHK110122C00025000, $0.35, down $0.10)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.30

Return: -70%

Stop Target: None

Action:  Continue to hold.     


Dendreon (DNDN, $36.21, up $0.75) (COVERED CALL)

December 40 call (DNDN101218C00040000, $1.25, up $0.35)  

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: -7%
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 (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)

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, $19.52, down $0.43)

Action:  From this morning:

“The stock is nearing its 52-week low of $19.82 and it appears this level could be taken out this week.  We aren’t trying to play a rebound, instead, we are looking at this as a covered call trade.  The one thing that worries us is that Cisco could be losing market share so we may not have found a bottom yet.  There could be a test down to $18 and possibly $15 if the company doesn’t turn things around.”


Juniper Networks (JNPR, $33.82, down $0.52)

January 35 calls (JNPR110122C00035000, $1.50, down $0.30)

December 35 calls (JNPR101218C00035000, $0.90, down $0.20)

Action:  Also from this morning:

“We still like the December 35’s which may get below $1 but we also like the January calls because they buy us more time for shares to make a run at $40.”


Foster Wheeler (FWLT, $27.61, down $0.17)

January (2011) 32 calls (FWLT110122C00032000, $0.55, down $0.05)

Action:  We dropped coverage of the December 30 calls because the January calls offer more time.


Ingersoll-Rand (IR, $41.79, down $0.40)

December 45 calls (IR101218C00045000, $0.30, down $0.15)

Action:  Watch for now. 


JDS Uniphase (JDSU, $11.49, down $0.17)

March 13 calls (JDSU110319C00013000, $0.70, down $0.05)

Action:  Watch for now. 


BMC Software (BMC, $44.01, down $0.62)

December 50 calls (BMC101218C00050000, $0.40, down $0.10)

Action:  BMC continues to be a rumored buyout target.  


Riverbed Technology (RVBD, $27.63, down $1.22)

December 35 calls (RVBD101120C00060000, $0.25, down $0.10)

March 40 calls (RVBD110319C00040000, $0.50, down $0.20)

Action:  We are starting to LOVE the March 40 calls.