December 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.

12:45pm (EST)

FedEx (FDX, $93.15, down $0.14)

January 100 calls (FDX110122C00100000, $1.20, down $0.10)

Entry Price:  $1.25 (11/30/10)

Exit Target: $2.00-$2.50 (closed half @ $2.15 on 12/2/10, half at $1.05 on 12/7/10)

Return: 28%

Stop Target: $1.05, HARD STOP

Action:  Oh good grief!  We feel like Charlie Brown because we are frustrated with today’s action which took us out of a good trade.  The options have traded to a low of $1.02 which stopped us out of the other half.  The calls traded as high as $1.40 but shares are struggling with resistance. 

Although the trade is over, don’t be surprised if we come right back with another one for FedEx as we still think shares are headed to $100+.


Foster Wheeler (FWLT, $30.39, down $0.25)

January 30 calls (FWLT110122C00030000, $1.90, down $0.20)

Entry Price:  $1.00 (11/30/10)

Exit Target: $2.00+ (closed half @ $1.90 on 12/2/10)

Return: 90%

Stop Target: $1.75

Action:  Continue to hold the other half for now.

 

Electronic Arts (ERTS, $15.45, up $0.05)

March 20 calls (ERTS110319C00020000, $0.22, flat)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: 0%

Stop Target: None

Action:  This sector is heating up.  We can feel the momentum coming for some M&A activity.  Continue to hold.


JDS Uniphase (JDSU, $12.97, up $0.12)

March 12 calls (JDSU110319C00012000, $1.70, up $0.05) 

Entry Price:  $1.25 (11/19/10)

Exit Target: $2.50

Return:  36%

Stop Target: $1.25

Action:  Shares are pushing $13 in early action.  Continue to hold.


Riverbed Technology (RVBD, $35.29, down $0.28)

March 35 calls (RVBD110319C00035000, $4.20, down $0.20)

Entry Price:  $1.40 (11/17/10)

Exit Target: $2.80 (closed half @ $3.00 on 11/23/10)

Return: 157%

Stop Target:  $3.20 (HARD STOP on other half) 

Action:  Continue to hold the other half.


CBOE Holdings (CBOE, $24.66, down $0.16)

December 25 calls (CBOE101218C00025000, $0.40, up $0.05) 

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: -47%

Stop Target: None

Action:  We need a run to $25.75 to at least break even on this trade.  Continue to hold but realize these options expire in 10 days so we run the risk of losing our premium if shares can’t break $25.


Darden Restaurants (DRI, $50.61, up $0.50)

December 49 calls (DRI101218C00049000, $2.00, up $0.40) 

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+ (closed half @ $1.80 on 12/1/10)

Return:  58%

Stop Target: $1.25   

Action:  Continue to hold the other half but we will be looking to close this trade on continued strength as they are December options.


Aruba Networks (ARUN, $22.57, down $0.41)

January 25 calls (ARUN110122C00025000, $0.70, down $0.10) 

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -42%

Stop Target:  Close the trade is shares fall below $20

Action:  Aruba is capable of big moves but we aren’t digging the current action.  Continue to hold for now but we may close the trade early on a drop below $22. 


PowerShares QQQ (QQQQ, $54.15, up $0.30)

January 53 calls (QQQQ110122C00053000, $2.05, up $0.15)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 33%

Stop Target: $1.40 

Action:  Continue to hold.


American Tower (AMT, $51.78, up $0.01)

April (2011) 60 calls (AMT110416C00060000, $0.55, flat)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  -15%

Stop Target: None

Action:  These options have xx days before expiration.  We are looking for a run back towards its 52-week high of $53+ over the near-term.  Continue to hold.


Dendreon (DNDN, $37.74, down $0.33) (COVERED CALL)

December 40 call (DNDN101218C00040000, $0.20, down $0.10)

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: -3%

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.   


Biodel March 7.50 calls (from October)

Chesapeake Energy January 25 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.

DryShips (DRYS, $6.05, down $0.16)

March 7 calls (DRYS110319C00007000, $0.40, down $0.08)

June 7 calls (DRYS110618C00007000, $0.60, down $0.10)

Action:  We would like to see shares come down to $5.75.


McDonald’s (MCD, $80.49, up $0.91)

January 80 calls (MCD110122C00080000, $2.00, up $0.40))

Action:  The stock opened at $79.96 while the options opened at $1.68.  If you got in on the break above $80 for a day trade like we said, you are up 18%.


Juniper Networks (JNPR, $34.47, up $0.27)

January 35 calls (JNPR110122C00035000, $1.20, up $0.05)

Action:  We made 10% on the December calls and we closed these out yesterday for 13% but we still like the stock. However, shares haven’t displayed the momentum we would like to see although we think a run to $40 by mid-January is still in the cards.


CurrencyShares Euro Trust (FXE, $132.67, up $0.03)

January 125 puts (FXE110122P00125000, $0.60, flat)

Action:  We would like to see a run back to $135 before we go short.  We think the Euro is headed to $1.25 by mid-January.  These look so tempting at current levels.  


Skyworks Solutions (SWKS, $27.69, up $0.07)

January 26 calls (SWKS110122C00026000, $2.40, flat)

Action:  The calls have already doubled since we first profiled them and we are looking at other options in Skyworks.     


THQ (THQI, $5.62, up $0.05)

March 5 calls (THQI110319C00005000, $1.10, flat)

Action:  Continue to watch.


Ingersoll-Rand (IR, $43.74, up $0.72)

January 42.50 calls (IR110122C00042500, $2.30, up $0.50)

Action:  These options have doubled since we originally profiled them.  If you are in, close half.

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