Krisp Kreme (KKD, $8.67, down $0.31)
July 10 calls (KKD110716C00010000, $0.25, down $0.05)
Entry Price: $0.20 (6/14/11)
Exit Target: $0.40+
Stop Target: None
Action: Krispy Kreme hit a high of $9.10 yesterday but shares had a rough time gaining traction given the overall market downtrend. Volume was once again heavy as over 1,000 contracts traded hands.
RealD (RLD, $24.27, up $1.28)
July 20 puts (RLD110716P00020000, $0.50, down $0.20)
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 despite yesterday’s pop. 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, $35.17, down $0.59)
July 32.50 puts (RIMM110716P00032500, $1.45, up $0.20)
Entry Price: $0.75 (6/6/11)
Exit Target: $1.50 (closed half at $1.35 on 6/15/2011)
Stop Target: None
Action: We closed half the trade at $1.35 yesterday to lock in profits. There is still slight upside risk if the company reports good numbers after the close and raises their outlook but we don’t see it happening.
Zagg (ZAGG, $12.15, down $0.40)
July 12 calls (ZAGG110716C00012000, $0.80, down $0.30)
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: We also closed half of this trade yesterday and we are monitoring the other half closely to make certain we lock in triple-digit gains. If shares continue to retreat will will probably close the other half at 40 cents.
Darling International (DAR, $18.64, down $0.18)
July 20 calls (DAR110716C00020000, $0.35, down $0.05)
Entry Price: $0.50 (5/27/11)
Exit Target: $1.00
Stop Target: None
Action: Darling reached a high of $18.91 before settling slightly lower. We have a $20-$21+ target on the stock by mid-July which should get these options to $1.00 or more.
Vivus (VVUS, $7.77, down $0.09)
September 10 calls (VVUS110917C00010000, $0.30, down $0.05)
Entry Price: $0.65 (5/20/11)
Exit Target: $1.30
Stop Target: None
Action: 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, $19.34, down $0.20)
September 20 calls (SGEN110917C00020000, $2.20, flat)
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: Shares fell 1% yesterday but the “ask” stayed strong on the options. We still have to watch this because we don’t want to give back profits but we also want to stay in the trade so we may ride this one out. If shares do trend lower we can reload. This is our favorite stock for 2011, hands down.
We also like the September 25 calls (SGEN110917C00025000, $0.55, down $0.10) which are getting “cheap”. Our price target for Seattle Genetics is $30.
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)
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)
Starbucks June 38 calls (from May 2011)
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.
Titan Machinery (TWI, $21.51, down $1.09)
July 22.50 calls (TWI110716C00022500, $1.00, down $0.30)
Thoughts: Shares pulled back 5% yesterday so we are following the 22.50’s.
VeriFone Systems (PAY, $41.35, down $0.90)
July 45 calls (PAY110716C00045000, $0.90, down $0.30)
July 38 puts (PAY110716P00038000, $1.05, up $0.10)
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, $18.53, down $0.13)
October 20 calls (SYMC111022C00020000, $0.75, down $0.05)
Thoughts: 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, $127.02, down $2.30)
July 125 put (SPY110716P00125000, $2.10, up $0.90)
July 130 call (SPY110716C00130000, $1.05, down $0.80)
Thoughts: We should have been playing this strangle trade since Monday as both options are making incredible swings this week due to the volatility.
Polycom (PLCM, $57.76, down $1.13)
July 62.50 calls (PLCM110716C00062500, $1.20, down $0.40)
Thoughts: Continue to watch.
Wells Fargo (WFC, $27.02, up $0.12)
July 26 puts (WFC110716P00026000, $0.75, up $0.20)
Thoughts: We knew at 50 cents these options were cheap but we were hoping Wells was going to make a run to $28. If shares continue to decline we may add this trade by sending out an alert.
Caterpillar (CAT, $95.65, down $2.21)
July 95 puts (CAT110716P00095000, $3.10, up $1.10)
Thoughts: We just keep missing a nice entry point for CAT.