February 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.

1:10pm (EST)

Patriot Coal (PCX, $28.93, up $0.49)

March 30 calls (PCX110319C00030000, $2.00, up $0.25)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: 60%
Stop Target: 60 cents, raise to $1.30 

Action:  The options have traded to a high of $2.09 today and have 44 days before they expire.  We would like to lock in half profits at 100% which would be when the option hit $2.50. 


CurrencyShares  Euro Trust (FXE, $137.35, down $0.43)

March 134 puts (FXE110319P00134000, $1.20, flat)

Entry Price:  $1.60 (1/28/11)
Exit Target: $3.20
Return: -25%
Stop Target: 80 cents

Action:  We entered this position as a hedge against a market drop but it is a longer-term trade.  We still expect the Euro Trust to fall below $135 by March.  Continue to hold. 

 

Jabil Circuit (JBL, $20.67, down $0.05)

March 21 calls (JBL110319C00021000, $1.05, down $0.05)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 50%
Stop Target: None

Action:  The 52-week high for Jabil is $21.78 which was hit back in early January and shares have reached $20.94 today.  Continue to hold.

 
PowerShares QQQ (QQQQ, $57.03, down $0.02)

March 58 calls (QQQQ110319C00058000, $0.90, flat)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 20%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  We know we haven’t commented more on this trade but it’s that simple.  
 

Spider S&P 500 (SPY, $130.60, down $0.14)

February 131 calls (SPY110219C00131000, $1.40, down $0.05)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90 (closed half @ $1.35 on 2/1/11)
Return: 45%
Stop Target: $1.00 (HARD STOP) 

Action:  It was hard to close half of this trade yesterday but our game plan before we entered the position was to be out at the beginning of February.  We still have half open so it isn’t like we won’t enjoy further gains if shares go higher.  We like to stick to our trading plan as much as we can so we keep our emotions in check. 
 

Micron Technology (MU, $10.88, up $0.07)

April 10 calls (MU110416C00010000, $1.35, up $0.05)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 57%
Stop Target: None

Action:  Continue to hold.

 
JPMorgan Chase (JPM, $45.78, down $0.15)

February 46 calls (JPM110219C00046000, $0.75, down $0.10)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -15%
Stop Target: None

Action:  We have gotten rejected with this trade more times than a fat kid at prom.  Keeping it with the Kenny’s today, we are in the “Danger Zone” with these options because they expire in 16 days.  Continue to hold for now. 
 

Brocade Communications (BRCD, $5.85, up $0.16)

July 6 calls (BRCD110716C00006000, $0.67, up $0.12)

Entry Price:  $0.67 (1/4/11)
Exit Target: $1.35
Return: 0%
Stop Target: None

Action:  The 52-week high is $8 which gets these calls to $2 on a continued turnaround story.  Brocade could also be a takeover target down the road and these options have 163 days before they expire.  Continue to hold.  


Electronic Arts (ERTS, $17.90, up $2.28)

March 20 calls (ERTS110319C00020000, $0.20, up $0.12)

Entry Price:  $0.22 (11/24/10)
Exit Target: $0.50+
Return: -9%
Stop Target: None

Action:  Continue to hold.   
 

Other 2011 Portfolio OPEN positions (4):  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 2010)
American Tower April 60 calls (from October 2010)
Constellation Brands February 22.50 calls (from January 2011)
Vivus June 14 calls (from January 2011
 

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.

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

9:00am (EST)

Patriot Coal (PCX, $28.44, up $2.27)

March 30 calls (PCX110319C00030000, $1.75, up $0.65)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: 40%
Stop Target: 60 cents, raise to $1.30 

Action:  These options surged 60% yesterday and we are expecting a run to $30 for the stock.  We have raised the stop and we will be looking to close half of the trade on additional strength (or weakness) from here on out.  This was an earnings trade so we didn’t expect to keep it open for long anyway so let’s enjoy the ride while it lasts.


CurrencyShares  Euro Trust (FXE, $137.78, up $1.40)

March 134 puts (FXE110319P00134000, $1.20, down $0.35)

Entry Price:  $1.60 (1/28/11)
Exit Target: $3.20
Return: -25%
Stop Target: 80 cents

Action:  We entered this position as a hedge against a market drop but it is a longer-term trade.  We still expect the Euro Trust to fall below $135 by March.  Continue to hold. 

 

Jabil Circuit (JBL, $20.72, up $0.51)

March 21 calls (JBL110319C00021000, $1.05, up $0.15)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 50%
Stop Target: None

Action:  The 52-week high for Jabil is $21.78 which was hit back in early January.  Yesterday’s high was $20.95 so we are moving in the right direction.

PowerShares QQQ (QQQQ, $57.05, up $1.05)

March 58 calls (QQQQ110319C00058000, $0.90, up $0.30)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 20%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  We know we haven’t commented more on this trade but it’s that simple.   


Spider S&P 500 (SPY, $130.74, up $2.06)

February 131 calls (SPY110219C00131000, $1.45, up $0.70)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90 (closed half @ $1.35 on 2/1/11)
Return: 47%
Stop Target: $1.00 (HARD STOP) 

Action:  It was hard to close half of this trade yesterday but our game plan before we entered the position was to be out at the beginning of February.  We still have half open so it isn’t like we won’t enjoy further gains if shares go higher.  We like to stick to our trading plan as much as we can so we keep our emotions in check.
 

Micron Technology (MU, $10.81, up $0.27)

April 10 calls (MU110416C00010000, $1.30, up $0.10)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 53%
Stop Target: None

Action:  Like a Polaroid, sometimes you can clearly the picture developing.  We are expecting shares of Micron to break its 52-week high of $11.40, very soon, which could lead to “blue-sky” territory.

 
JPMorgan Chase (JPM, $45.93, up $0.99)

February 46 calls (JPM110219C00046000, $0.85, up $0.35)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -3%
Stop Target: None

Action:  The boys (and girls) at JP are doing us proud.  We are pretty certain this trade has been in negative territory since we opened it and we went long on this name when it appeared the Financial stocks were breaking out. 

Long story short was that JPMorgan came in with better-than-most earnings results and now we get our reward, hopefully, if shares continue higher.  We have an itchy trigger finger because we don’t like holding options this close to expiration so we may exit soon.  Continue to hold for now. 
 

Brocade Communications (BRCD, $5.69, up $0.05)

July 6 calls (BRCD110716C00006000, $0.55, down $0.05)

Entry Price:  $0.67 (1/4/11)
Exit Target: $1.35
Return: -18%
Stop Target: None

Action:  The 52-week high is $8 which gets these calls to $2 on a continued turnaround story.  Brocade could also be a takeover target down the road and these options have 163 days before they expire.  Continue to hold.  


Electronic Arts (ERTS, $15.62, up $0.03)

March 20 calls (ERTS110319C00020000, $0.08, down $0.01)

Entry Price:  $0.22 (11/24/10)
Exit Target: $0.50+
Return: -64%
Stop Target: None

Action:  Welcome back EA.  After a month in the doghouse, we can finally let these options back in the house after they were on hold.  Let’s face it folks, it’s hard to get excited about a 20 cent option trade but if it flies to $1, then there is reason to celebrate.  We aren’t getting to $1 today but we could get to 30-40 cents.

Our target for the stock was $20+ when we recommended the trade which is why we went with these call options.  At $21, these options were going to be worth $1.  They should open higher and EA could rally further.  However, we will have to watch these options carefully because they will still be $2-$3 out-of-the-money at the open but we have until March.


Other 2011 Portfolio OPEN positions (4):  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 2010)
American Tower April 60 calls (from October 2010)
Constellation Brands February 22.50 calls (from January 2011)
Vivus June 14 calls (from January 2011)
 

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.


Akamai Technologies (AKAM, $49.07, up $0.75)

February 55 calls (AKAM110219C00055000, $0.60, up $0.06)

March 55 calls (AKAM110319C00055000, $1.10, up $0.10)

Thoughts:  We are hearing shares of Akamai are a strong takeover target and there are numerous companies that would love to have this gem.  The company announces earnings next week (February 9) and we think they are going to crush Wall Street’s estimates.


Skyworks Solutions (SWKS, $32.72, up $0.95)

March 34 calls (SWKS110319C00034000, $1.20, up $0.30)

Thoughts:  We have a feeling Skyworks is going to explode higher this year.  We would love to be in these calls and we are seriously looking at the August 45’s which are at 70 cents.


Pan American Silver (PAAS, $34.58, up $1.77)

March 36 calls (PAAS110319C00036000, $1.45, up $0.40)

Thoughts:  We think shares can run back towards $40 over the next 6 weeks.

Molycorp (MCP, $48.60, up $1.79)

February 50 calls (MCP110219C00050000, $1.85, up $0.35)

Thoughts:  We would love to get the 50’s for a buck but we may have to move out to the March options while we find the perfect entry point for getting in a trade.  The company is also offering additional shares which some investors feel is a bad thing but it’s not.  Molycorp could double and hit $100 this year if shares get the momentum we think they are going to get.  It’s hard to say when but that is what our gut is telling us.

Imax (IMAX, $27.37, up $1.78)

March 28 calls (IMAX110319C00028000, $1.60, up $0.55)

June 30 calls (IMAX110618C00030000, $1.80, up $0.50)

Thoughts:  We had an itch and we should have scratched it.  Shares of Imax surged yesterday after the company said it was going to the NYSE.  We almost hoped on the Imax bus and we don’t like chasing but Imax could be back above $30, quickly.   

Green Mountain Coffee Roasters (GMCR, $33.25, down $0.33)

March 36 calls (GMCR110319C00036000, $1.35, down $0.15)

March 30 puts (GMCR110319P00030000, $1.15, up $0.05)

Thoughts:  We like this strangle trade a lot but watch for now.