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.

 

1:00pm (EST)

THQ (THQI, $5.72, up $0.11)

June 6 calls (THQI110618C00006000, $0.90, up $0.15)

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 20%

Stop Target: None

Action:  We will provide a full update in the morning but we are expecting these calls to reach $2 – well over a double from current levels.  These options have 191 days before expiration.


Foster Wheeler (FWLT, $31.50, up $0.90)

January 30 calls (FWLT110122C00030000, $2.55, up $0.55)

Entry Price:  $1.00 (11/30/10)

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

Return: 120%

Stop Target: $1.75

Action:  We are looking for a run to $35 by mid-January which gets the calls to $5.  Continue to hold the other half.

 

Electronic Arts (ERTS, $15.62, up $0.11)

March 20 calls (ERTS110319C00020000, $0.22, flat)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: 0%

Stop Target: None

Action:  Continue to hold.


JDS Uniphase (JDSU, $12.90, up $0.24)

March 12 calls (JDSU110319C00012000, $1.65, up $0.10) 

Entry Price:  $1.25 (11/19/10)

Exit Target: $2.50

Return:  32%

Stop Target: $1.25

Action:  We have a $15 price target which will get these options to $3+.  Continue to hold.


Riverbed Technology (RVBD, $34.82, down $0.10)

March 35 calls (RVBD110319C00035000, $3.80, down $0.10)

Entry Price:  $1.40 (11/17/10)

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

Return: 143%

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

Action:  Continue to hold the other half.


CBOE Holdings (CBOE, $24.21, down $0.58)

December 25 calls (CBOE101218C00025000, $0.30, down $0.10) 

Entry Price:  $0.75 (11/8/10)

Exit Target: $2.40+

Return: -60%

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 9 days before expiration.


Darden Restaurants (DRI, $49.62, down $0.68)

December 49 calls (DRI101218C00049000, $1.20, down $0.50) 

Entry Price:  $1.20 (11/8/10)

Exit Target: $2.40+ (closed half @ $1.80 on 12/1/10, closed half @ $1.30 on 12/8/10)

Return:  29%

Stop Target: $1.25, raise to $1.40    

Action:  We closed the other half of the trade earlier this morning when our $1.40 stop was triggered.  Our average selling price was $1.55 and we closed the trade after a month and made 30%.  No complaints on our end although we were looking for a little more love from the market to keep shares above $50.


Aruba Networks (ARUN, $22.70, up $0.40)

January 25 calls (ARUN110122C00025000, $0.75, up $0.10) 

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -38%

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

Action:  Aruba is capable of big moves and there is support at $20.50.  We still feel shares can make a push past $25 by mid-January as it consolidates in its recent range of $21-$23.  Continue to hold for now.


PowerShares QQQ (QQQQ, $53.88, flat)

January 53 calls (QQQQ110122C00053000, $1.85, flat)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 20%

Stop Target: $1.40 

Action:  Continue to hold.


American Tower (AMT, $50.97, down $0.79)

April (2011) 60 calls (AMT110416C00060000, $0.45, down $0.10)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  -31%

Stop Target: None

Action:  Continue to hold.


Dendreon (DNDN, $37.52, up $0.16) (COVERED CALL)

December 40 call (DNDN101218C00040000, $0.20, 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: -4%

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.

We will update this section in the morning.

****************

11:00am (EST)

NEW TRADE!!!

THQ (THQI, $5.65, up $0.04)

Buy to OPEN June 6 calls (THQI110618C00006000, $0.75, flat)

Action:  Use limit prices of 75-80 cents but you can go up to 90 cents, if needed, to get filled.  There is a lot of chatter on this stock right now and we think a move back towards its 52-week high of $8 is coming.  It may not happen overnight but by mid-June, we are expecting shares to be at $8 or higher with a good possibility of a buyout offer coming.

This gets the call options to $2 – well over a double from current levels.  These options have 191 days before expiration.


CURRENT TRADES

Darden Restaurants (DRI, $49.75, down $0.55)

December 49 calls (DRI101218C00049000, $1.30, down $0.40) 

Entry Price:  $1.20 (11/8/10)

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

Return:  29%

Stop Target: $1.25, raise to $1.40    

Action:  Close the other half of the trade as the options have fallen below our $1.40 stop.  We still like Darden and gave back a little today but we still made nearly 30%.

*********************

9:00am (EST)

Foster Wheeler (FWLT, $30.60, down $0.14)

January 30 calls (FWLT110122C00030000, $2.00, down $0.10)

Entry Price:  $1.00 (11/30/10)

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

Return: 95%

Stop Target: $1.75

Action:  The stop of $1.75 locks in a 80+% return but we are looking for a run to $35 by mid-January which gets the calls to $5.  Continue to hold the other half.

 

Electronic Arts (ERTS, $15.51, up $0.08)

March 20 calls (ERTS110319C00020000, $0.22, flat)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: 0%

Stop Target: None

Action:  Shares hit a high of $15.65 yesterday.  Continue to hold.


JDS Uniphase (JDSU, $12.66, down $0.19)

March 12 calls (JDSU110319C00012000, $1.55, down $0.10) 

Entry Price:  $1.25 (11/19/10)

Exit Target: $2.50

Return:  24%

Stop Target: $1.25

Action:  Shares made a high of $13.07 yesterday before retreating.  The options traded up to $1.71.  We have a $15 price target which will get these options to $3+.  Continue to hold.


Riverbed Technology (RVBD, $34.92, down $0.65)

March 35 calls (RVBD110319C00035000, $3.90, down $0.10)

Entry Price:  $1.40 (11/17/10)

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

Return: 146%

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

Action:  Continue to hold the other half.


CBOE Holdings (CBOE, $24.79, down $0.03)

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 before expiration.


Darden Restaurants (DRI, $50.30, up $0.19)

December 49 calls (DRI101218C00049000, $1.70, up $0.10) 

Entry Price:  $1.20 (11/8/10)

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

Return:  46%

Stop Target: $1.25, raise to $1.40    


Action:  Shares set a 52-week high of $50.83 before falling back while the calls traded to $2.  Continue to hold the other half but we will be looking to close this trade on continued strength as they are December options.  If our stop of $1.40 comes into play, we will probably close the trade.  This would bank us a 30% profit but we are looking for more than that. 


Aruba Networks (ARUN, $22.30, down $0.68)

January 25 calls (ARUN110122C00025000, $0.65, down $0.15) 

Entry Price:  $1.20 (11/2/10)

Exit Target: $2.40+

Return: -46%

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

Action:  Aruba is capable of big moves and there is support at $20.50.  We still feel shares can make a push past $25 by mid-January as it consolidates in its recent range of $21-$23.  Continue to hold for now.


PowerShares QQQ (QQQQ, $53.88, up $0.03)

January 53 calls (QQQQ110122C00053000, $1.85, down $0.05)

Entry Price:  $1.54 (10/27/10)

Exit Target: $3.00+

Return: 20%

Stop Target: $1.40 

Action:  Continue to hold.


American Tower (AMT, $51.76, down $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:  Shares got an “Outperform” upgrade on Monday based on strong growth.  We said this a month ago.  However, these options are slightly lower but have traded as high as $1 since we have been in.

The calls have 128 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, $37.36, down $0.71) (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: -4%

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.

Adobe Systems (ADBE, $29.02, down $0.21)

January 30 calls (ADBE110122C00030000, $1.15, down $0.20)

April 33 calls (ADBE110416C00033000, $1.10, flat)

April 26 puts (ADBE110416P00026000, $1.25, down $0.03)

Action:  Adobe dropped 20% the last time they announced earnings and they are scheduled to release numbers again on December 20.  We recommended a STRANGLE option trade back in September, a day before earnings, because we were factoring a 10+% move in the stock.  We weren’t sure which way shares were headed but they were at $33 at the time before falling below $27 after the announcement. 

We did know a move above $36 or below $30 was coming which is why we went with the strangle option trade.  This time around, there is a chance Adobe slips in with an earnings beat, or they could miss.  We are pretty certain a 10% move is a given but 20% could be in the cards again.

We don’t need to take action NOW, we will wait until the week of earnings to play this one but a break over $30 would be very bullish over the short-term.  The January calls could be used on a breakout just like we profiled McDonald’s yesterday but we are looking at a bevy of option possibilities for Adobe.


Research In Motion (RIMM, $62.12, down $1.21)

December 65 calls (RIMM101218C00065000, $1.30, down $0.65)


January 70 calls (RIMM110122C00070000, $1.30, down $0.40)

January 55 puts (RIMM110122P00055000, $1.30, up $0.20)

Action:  RIMM reports earnings NEXT Thursday, a day before the December options expire.  We are not taking any action on these options because we aren’t sure how this one is going to play out.  We are in the “planning stages” and we may play RIMM straight up, we may play a straddle or strangle option trade, or we may sit on the sidelines.


DryShips (DRYS, $6.02, down $0.19)

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, $80.34, up $0.76)

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

Action:  The stock opened at $79.96 while the options opened at $1.68 yesterday.


Juniper Networks (JNPR, $34.08, down $0.07)

January 35 calls (JNPR110122C00035000, $1.10, down $0.110)

Action:  We might take another stab at these options if we see a good entry point.


CurrencyShares Euro Trust (FXE, $132.23, down $0.41)

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, $27.28, down $0.34)

January 28 calls (SWKS110122C00028000, $1.15, flat) 

Action:  We missed with some earlier call options but if shares stay strong, we may add these. 


THQ (THQI, $5.61, up $0.04)

March 5 calls (THQI110319C00005000, $1.10, flat)

Action:  Continue to watch.


Ingersoll-Rand (IR, $43.68, up $0.66)

January 42.50 calls (IR110122C00042500, $2.20, up $0.40)

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

]]>