January 2011 | 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.


1:30pm (EST)

JPMorgan Chase (JPM, $44.44, up $0.73)

February 46 calls (JPM110219C00046000, $0.60, up $0.15) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -32%

Stop Target: None

Action:  Continue to hold.


Vivus (VVUS, $10.57, up $0.17)        

June 14 calls (VVUS110618C00014000, $1.00, flat)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: -9%

Stop Target: 75 cents         

Action:  These options have 148 days before they expire.

Vivus should be meeting with the FDA by the end of this month to discuss the content of the proposed resubmission for Qnexa, the company’s diet drug which they are hoping to get a fast-track approval on.  Vivus is also filing a new drug application (NDA) filing for Avanafil, its “good wood” drug, in the second quarter of 2011.   

 

Apollo Group (APOL, $42.72, up $0.55)

February 34 puts (APOL110219P00035000, $0.15, down $0.03)

Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)   

Return: 9%

Stop Target: None

Action:  We closed half at $1.70 on 1/10/11 and the current 15 cents on the other half gives an average price of $0.925 so far.  Continue to hold the other half.


Louisiana-Pacific (LPX, $9.25, down $0.44)

May 11 calls (LPX110521C00011000, $0.50, down $0.10)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: -29%

Stop Target: None

Action:  Too many warning signs to ignore.  Let’s take our lumps and close the trade.  You should be able to get 45-50 cents for the calls.

 

Brocade Communications (BRCD, $5.58, down $0.10)

July 6 calls (BRCD110716C00006000, $0.60, down $0.03)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: -10%

Stop Target: None   

Action:  Continue to hold.   

     

Skyworks Solutions (SWKS, $29.99, down $1.92)

May 32 calls (SWKS110521C00032000, $2.10, down $0.80)   

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)

Return: 59%

Stop Target: $2.50       

Action:  These option have 120 days before they expire and we are going to take our chances with earnings.  We think Skyworks will pull through and if Tech rebounds, this name will get some attention.

  

Seattle Genetics (SGEN, $15.86, down $0.25)

March 17.50 calls (SGEN110319C00017500, $0.65, down $0.05)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40 (closed half @ $1.20 on 1/18/11)

Return: 39%

Stop Target: 75 cents (HARD STOP)

Action:  Our 75 cent hard stop was triggered yesterday so everyone should be out of this trade by now.


Electronic Arts (ERTS, $15.67, down $0.17)

March 20 calls (ERTS110319C00020000, $0.10, down $0.03) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -55%

Stop Target: None

Action:  Continue to hold.  These options were only 22 cents and it is a cheap play on a buyout or takeover target.  A 10 contract trade was $220 so we are going to ride this one out to the end.


Other 2011 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.

Biodel March 7.50 calls (from October)

American Tower April 60 calls (from October)

Constellation Brands February 22.50 calls (from January) 


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.


Cree (CREE, $52.34, down $1.29)

June 60 calls (CREE11618C00060000, $3.60, down $0.55)

March 55 calls (CREE110319C00055000, $2.50, down $0.60)

Thoughts:  Just watching for now.


Jabil Circuit (JBL, $20.17, down $0.73)

February 20 calls (JBL110219C00020000, $1.00, down $0.40)

Thoughts:  We have listed the Feb 20’s instead of the 22’s because it would be a better trade for profits if JBL can rebound.


Imax (IMAX, $26.43, down $0.24)

June 35 calls (IMAX110618C00035000, $0.60, down $0.10)

March 30 calls (IMAX110319C00030000, $1.00, down $0.10)

Thoughts:  We will probably pull the trigger on one of these on Friday.. 


Green Mountain Coffee Roasters (GMCR, $34.03, down $0.50)

February 35 calls (GMCR110219C00035000, $1.55, down $0.35)

Thoughts:  We are now following the 35’s instead of the 40’s.

==========================

9:00am (EST)

JPMorgan Chase (JPM, $43.71, down $1.04)

February 46 calls (JPM110219C00046000, $0.45, down $0.33) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -49%

Stop Target: None

Action:  We knew when we got into this position it would be volatile and risky because we are running February options.  We also mentioned how we didn’t trust the Financials but if a continued rally were to take place, the market would need this sector to start performing.

We tried to go with one of the best names in the group, and JPM had its price target increased from $46 to $52 yesterday, but it hasn’t mattered.  The trade is down nearly 50% but we don’t carry stops on options under $1.

The calls still have 4 weeks before they expire so we will ride this out.  However, our best guess is if there is NOT a rebound or a hold of support by the Financials, then this trade will probably continue to go lower.  Let’s see how this “shakeout” unfolds.  


Vivus (VVUS, $10.40, down $0.71)        

June 14 calls (VVUS110618C00014000, $1.00, down $0.25)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: -9%

Stop Target: 75 cents         

Action:  These options have 148 days before they expire and could get cheaper but we aren’t trying to “trade” these call options.  They could get cheaper but we are committed to this trade because we are looking for shares to push $20 by summertime.

Vivus should be meeting with the FDA by the end of this month to discuss the content of the proposed resubmission for Qnexa, the company’s diet drug which they are hoping to get a fast-track approval on.  Vivus is also filing a new drug application (NDA) filing for Avanafil, its “good wood” drug, in the second quarter of 2011.  

 

Apollo Group (APOL, $42.17, down $1.13)

February 34 puts (APOL110219P00035000, $0.18, up $0.03)

Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)   

Return: 11%

Stop Target: None

Action:  We need shares to trend and fall back below $40 which will give this trade some momentum.

We closed half at $1.70 on 1/10/11 and the current 18 cents on the other half gives an average price of $0.94 so far.  Continue to hold the other half.


Louisiana-Pacific (LPX, $9.69, down $0.32)

May 11 calls (LPX110521C00011000, $0.60, down $0.15)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: -14%

Stop Target: None

Action:  Shares got hit with another downgrade, its second in two weeks.  We just mentioned that we don’t carry stops on options under a buck but we are probably going to close this trade today.  We could ride the storm out with this one but the company has missed estimates a couple of times over the last few quarters so we don’t feel comfortable with this trade anymore.  

We will send out an alert if we close it before 1pm, if not, we will make the call in our afternoon update.  

 

Brocade Communications (BRCD, $5.68, down $0.16)

July 6 calls (BRCD110716C00006000, $0.63, down $0.09)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: -6%

Stop Target: None   

Action:  We had listed a stop target because the trade was profitable.   However, it was not a HARD STOP.  We don’t carry stops on options under $1 if we are entering a trade and these calls have 175 days to mature.  Continue to hold.   

   

Micron Technology (MU, $9.37, down $0.29)

April 9 calls (MU110416C00009000, $1.05, down $0.20)

Entry Price:  $0.50 (1/3/11)

Exit Target: $2.00 (closed half @ $1.25 on 1/18/11)    

Return: 125%

Stop Target:  $1.00 (HARD STOP)

Action:  We were stopped out of the other half of this trade yesterday and we said this week we would need to start taking our profits.  The average closing price was $1.125.

We were hoping to ride this wave a little longer but it’s hard to complain when you bank triple-digits.  We will keep these calls on our Watch List and wait for a possible break above $10 down the road or a test and hold of support.


Riverbed Technology (RVBD, $36.97, down $2.09)     

March 40 calls (RVBD110319C00040000, $2.20, down $0.90)

Entry Price:  $1.70 (12/29/10)

Exit Target: $4+ (closed half @ $3.00 on 1/7/11)   

Return: 62%

Stop Target: $2.50 (HARD STOP on other half) 

Action:  We had a feeling our hard stop would be hit and sure enough, it was.  The selling pressure picked up after our 1pm update and things got worse.  Riverbed is on sale but let’s make sure $30 holds over the next few weeks although we were just talking $40.  Crazy…crazy good.       


Skyworks Solutions (SWKS, $31.91, down $0.85)

May 32 calls (SWKS110521C00032000, $2.90, down $0.50)   

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)

Return: 82%

Stop Target: $2.50       

Action:  We want to stay in this trade and it’s going to be hard because Tech is struggling with earnings.  Hopefully this isn’t the case with Skyworks and we are hoping we can ride out any short-term bumps as we feel this stock could roll this year.

 

JDS Uniphase (JDSU, $16.52, down $0.47)

March 15 calls (JDSU110319C00015000, $2.00, down $1.10)

Entry Price:  $0.78 (12/27/10)

Exit Target: $4 (closed half @ $1.80 on 1/7/11)

Return: 150%

Stop Target: $2.10 (HARD STOP)

Action:  We were stopped out of the other half of this trade yesterday as well.  Shares were down another 47 cents in after-hours last night.  We closed half of the trade at $2.10 and half at $1.80 which gave us an average price of $1.95, or 150%.  We told you there was a reason we work through Christmas breaks while the Wall Street pros take off.  “They” don’t do homework, we do.  


Seattle Genetics (SGEN, $16.11, down $0.80)

March 17.50 calls (SGEN110319C00017500, $0.70, down $0.40) 

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40 (closed half @ $1.20 on 1/18/11)

Return: 36%

Stop Target: 75 cents (HARD STOP)

Action:  Shares had a good run up into the conference last week but are coming back to fill in some gaps.  We may have to exit this one early to protect profits but we will keep this one close to the vest.  We are looking at LEAP options on SGEN as well.


THQ (THQI, $5.66, down $0.28) 

June 6 calls (THQI110618C00006000, $0.75, down $0.15) 

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 7%

Stop Target: 50 cents

Action:  We recommended closing this trade yesterday for a slight profit.  We still like this story but it will go on the backburner for the moment.


Electronic Arts (ERTS, $15.84, down $0.16)

March 20 calls (ERTS110319C00020000, $0.13, down $0.02) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -41%

Stop Target: None

Action:  Continue to hold.  


Other 2011 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.

Biodel March 7.50 calls (from October)

American Tower April 60 calls (from October)

Constellation Brands February 22.50 calls (from January) 


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.


Cree (CREE, $53.63, down $9.08)

June 60 calls (CREE11618C00060000, $3.85, down $5.10)

March 55 calls (CREE110319C00055000, $3.10, down $6.70)

Thoughts:  Just watching for now.


Jabil Circuit (JBL, $20.92, down $0.72)

February 22 calls (JBL110219C00019000, $0.45, down $0.35)

Thoughts:  We love the current prices and we expect a big rebound out of the market after this slight pullback.  We may also go with the March 22.50’s (65 cents) instead of the Feb’s but we want to make sure $20 holds.   


Imax (IMAX, $26.67, down $0.72)

June 35 calls (IMAX110618C00035000, $0.70, down $0.20)

March 30 calls (IMAX110319C00030000, $1.10, down $0.20)

Thoughts:  We have added the March 30’s to our Watch List. 


Green Mountain Coffee Roasters (GMCR, $34.53, down $0.77)

February 40 calls (GMCR110219C00040000, $0.30, down $0.20)

Thoughts:  These options are getting “cheap” enough to where they are worth a serious look.  Green Mountain is also a takeover possibility.