LinkedIn (LNKD, $68.27, down $6.35)
July 55 puts (LNKD110716P00055000, $1.75, up $0.80)
Entry Price: $1.25 (6/16/11)
Exit Target: $2.50+
Stop Target: 60 cents
Action: Shares dropped $3 after our midday update and these options took off.
Krispy Kreme Doughnuts (KKD, $8.79, up $0.12)
July 10 calls (KKD110716C00010000, $0.30, up $0.05)
Entry Price: $0.20 (6/14/11)
Exit Target: $0.40+
Stop Target: None
Action: Krispy Kreme traded to a high of $8.98 yesterday and we would like to see a close above $9 today.
RealD (RLD, $24.22, down $0.05)
July 20 puts (RLD110716P00020000, $0.60, up $0.10)
Entry Price: $0.45 (6/9/11)
Exit Target: $0.90+ (closed half at $1.60 on 6/10/2011)
Stop Target: 75 cents
Action: We are looking for shares to trade down to $18 by mid-July. This would get the options to $2 on the other half. We do not recommend new positions but we are looking at a piggy-back trade.
Research In Motion (RIMM, $35.33, up $0.16)
July 32.50 puts (RIMM110716P00032500, $1.45, flat)
Entry Price: $0.75 (6/6/11)
Exit Target: $1.50 (closed half at $1.35 on 6/15/2011)
Stop Target: None
Action: For the knucklehead Wall Street hero’s who tried to step in front of this train, we tried to tell you RIMM was going to have a horrible quarter. These options should easily open over $2 and we may or may not close the other half. If shares open under $30 and hold then we will leave it open, if not, we will send out a Trade Alert if we close the position. The best prices might come at the open so stay locked and loaded.
Zagg (ZAGG, $12.34, up $0.19)
July 12 calls (ZAGG110716C00012000, $0.95, up $0.15)
Entry Price: $0.35 (6/1/11)
Exit Target: $0.70 (closed half at $1.00 on 6/15/2011)
Stop Target: 40 cents (on other half)
Action: Continue to hold as we have a near-term target of $14-$15 for Zagg.
Darling International (DAR, $17.07, down $1.57)
July 20 calls (DAR110716C00020000, $0.20, down $0.10)
Entry Price: $0.50 (5/27/11)
Exit Target: $1.00
Stop Target: None
Action: Darling tanked 8% yesterday on no news and traded to a low of $15.77. As quickly as the corn traded started, it suddenly got slammed. In any event, these were cheap options so we aren’t too worried about the percentage loss although we are disappointed in the sudden reversal. The bid is still 20 cents but we are moving this trade to the “hold” section until shares rebound.
Vivus (VVUS, $7.84, up $0.07)
September 10 calls (VVUS110917C00010000, $0.30, flat)
Entry Price: $0.65 (5/20/11)
Exit Target: $1.30
Stop Target: None
Action: Vivus spoke at an investor’s conference yesterday and will do it again next Wednesday at the Wells Fargo Securities Healthcare Conference. Maybe they throw us a bone.
The company may have a winner with Qnexa on two fronts which is what most analysts are forgetting. The drug has completed Phase 3 trials for obesity and is still awaiting approval from the FDA. However, Qnexa has also completed Phase 2 clinical trials and is hoping to get approval to treat diabetes and obstructive sleep apnea as well.
Seattle Genetics (SGEN, $19.55, up $0.21)
September 20 calls (SGEN110917C00020000, $2.35, up $0.15)
Entry Price: $1.50 (5/9/11)
Exit Target: $3.00 (closed half at $2.20 on 6/8/2011)
Stop Target: $1.60 (HARD STOP on other half)
Action: We said yesterday’s drop was an overreaction and smart buyers listened as they scooped the stock up off the lows. We are still waiting for a break above $20 to add to positions.
Other 2011 Portfolio OPEN positions (8): 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. This means we would not open any new positions. We are still keeping track of the trades and we will record the results, accordingly, when we close them or the options expire. Click on the 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus June 14 calls (from January 2011) – expires TODAY!
eBay July 40 calls (from February 2011)
RF MicroDevices August 10 calls (from February 2011)
Dendreon August 50 calls (from April 2011)
KLA-Tencor June 48 calls (from May 2011) – expires TODAY!
Starbucks June 38 calls (from May 2011) – expires TODAY!
MGM Resorts International September 17 calls (from May 2011)
Rediff.com India October 15 calls (from June 2011)
WATCH LIST SECTION
These trades are NOT recommendations. They 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 try not to have more than 12-15 open trades at any one time which is why we created a Watch List. We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.
OpenTable (OPEN, $77.61, down $0.83)
July 90 calls (OPEN110716C00090000, $0.90, down $0.20)
July 67.50 puts (OPEN110716P00067500, $1.00, up $0.10)
Thoughts: This position would have cost $1.90 if we had entered at yesterday’s prices. Let’s watch this strangle trade today and we will see where we are at next week. Shares are right near the middle with the 52-week high at $118 and the low at $40. This chicken trade could do really well as shares either continue their recent downtrend or they bounce back from the bullish wedge forming.
Titan Machinery (TWI, $21.09, down $0.42)
July 22.50 calls (TWI110716C00022500, $0.60, down $0.40)
Thoughts: Continue to watch.
VeriFone Systems (PAY, $39.78, down $1.57)
July 45 calls (PAY110716C00045000, $0.50, down $0.40)
July 38 puts (PAY110716P00038000, $1.75, up $0.70)
Thoughts: Short-term resistance is at $44 but a break past this level will lead to $46-$47. However, the magnet at $40 could pull shares there before a rebound. A break below $40 could lead to $35. This is almost setting up nicely for a strangle trade but the premiums are a little juiced.
Symantec (SYMC, $18.62, up $0.09)
October 20 calls (SYMC111022C00020000, $0.75, flat)
Thoughts: Shares are holding up well…We would like to see shares come down to $18 for a good entry point as we feel the stock will challenge new highs by October. The current 52-week high is $20.50.
S&P 500 Spiders (SPY, $127.30, up $0.28)
July 125 put (SPY110716P00125000, $2.10, flat)
July 130 call (SPY110716C00130000, $1.20, up $0.15)
Thoughts: Waiting for a breakout or breakdown.
Polycom (PLCM, $56.18, down $1.58)
July 62.50 calls (PLCM110716C00062500, $0.90, down $0.30)
Thoughts: We cover stock-splits in our options trading manual, How to Trade Options on Momentum Stocks, and shares are acting like we figured they would. After a run-up on the announcement, there is usually a pullback, followed by another uptrend. After the split, we will see where shares are at and wait for the next leg higher.
Wells Fargo (WFC, $26.80, up $0.25)
July 26 puts (WFC110716P00026000, $0.70, down $0.05)
Thoughts: Shares reached a high of $26.97 yesterday and we are getting close to pulling the trigger, maybe today. We are looking for Wells to make a run to $28 which is where we want to target entry positions before a possible test to $23-$22.
Caterpillar (CAT, $95.46, down $0.19)
July 95 puts (CAT110716P00095000, $3.30, up $1.20)
Thoughts: CAT was a hard cat to catch this week and we had a small window of opportunity to make some money. However, we hesitated waiting for a move back to $100. In any event, keep shares on your radar.