June 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.

1:35pm (EST)

LinkedIn (LNKD, $69.50, down $0.82)

July 55 puts (LNKD110716P00055000, $1.50, flat)

Entry Price:  $1.20 (6/24/11)

Exit Target: $2.40 

Return:  25%  

Stop Target:  None

Action:  We got the perfect opportunity to short LNKD as shares ran up to $72.73 and the options traded down to $1.10.  Our price target for the stock is $55 over the near-term but we will try to get out of these options by next week with a triple-digit profit as shares should fall back to the low $60’s.

 

Symantec (SYMC, $18.71, down $0.22)

October 20 calls (SYMC111022C00020000, $0.80, down $0.05) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -14%

Stop Target:  None

Action:  We are looking for a run past $20 by mid-October and these options have 4 months before they expire.

 

Wells Fargo (WFC, $26.99, down $0.05)  

July 26 puts (WFC110716P00026000, $0.50, up $0.05)

Entry Price:  $0.50 (6/20/11)

Exit Target: $1.00+  

Return:  0%

Stop Target:  None

Action:  Resistance at $28 is holding up like a champ and our target for Wells Fargo is $23 by mid-July.  There was a typo this morning and we said “mid-December”, sorry for the confusion, and thanks for the emails.

 

Rambus (RMBS, $14.33, down $0.11)

August 17 calls (RMBS110820C00017000, $0.45, down $0.05)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -25%

Stop Target:  None

Action:  Continue to hold.  


Krispy Kreme Doughnuts (KKD, $ KKD, $9.33, up $0.23)

July 10 calls (KKD110716C00010000, $0.30, up $0.05)

Entry Price:  $0.20 (6/14/11)

Exit Target: $0.40+  

Return:  50%

Stop Target:  None

Action:  Once shares crack new highs we should get a run past $10.


RealD (RLD, $24.88, up $0.47)       

July 20 puts (RLD110716P00020000, $0.35, flat)

Entry Price:  $0.45 (6/9/11)

Exit Target: $0.90+ (closed half at $1.60 on 6/10/2011)

Return:  115%

Stop Target:  30 cents

Action:  We still believe RealD will test $18 over the next 3 weeks.  We have already sold half the position at $1.60 and our entry price was 45 cents.  The gain on the closed half was 256% so even if these puts expire worthless the trade will make 78%.  Because of this, we will probably leave it open until expiration but we do not recommend new positions.


Vivus (VVUS, $7.71, up$0.09)

September 10 calls (VVUS110917C00010000, $0.25, flat)

Entry Price:  $0.65 (5/20/11)
Exit Target: $1.30
Return:  -62%
Stop Target:  None

Action:  Continue to hold.   


Seattle Genetics (SGEN, $20.58, up $0.36)

September 20 calls (SGEN110917C00020000, $2.80, up $0.25)

Entry Price:  $1.50 (5/9/11)

Exit Target: $3.00 (closed half at $2.20 on 6/8/2011)

Return:  67%

Stop Target:  $1.60 (HARD STOP on other half)

Action:  The FDA will review the company’s cancer drug, brentuximab vedotin, for two cures by mid-July.  The drug is hoping to gain approval to treat Hodgkin lymphoma and sleep apnea disorders. 


Other 2011 Portfolio OPEN positions (6):  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.

eBay July 40 calls (from February 2011)

RF MicroDevices August 10 calls (from February 2011)

Dendreon August 50 calls (from April 2011)

MGM Resorts International September 17 calls (from May 2011)

Rediff.com India October 15 calls (from June 2011)

Darling International July 20 calls (from May 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.

We will update this section on Monday morning.

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10:20am (EST)

LinkedIn (LNKD, $71.21, up $0.89)

Buy to OPEN July 55 puts (LNKD110716P00055000, $1.20, down $0.20)

Action:  Shares traded to a high of $72.73 at the open but have faded at resistance which is letting us know that it’s time to go short.  We normally don’t like opening new positions on Friday but we only plan on holding this option for a week or so.

Use limit prices of $1.20 to establish positions but do not pay more than $1.30-$1.35 to get filled.   

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

9:00am (EST)

Symantec (SYMC, $18.97, up $0.07)

October 20 calls (SYMC111022C00020000, $0.90, up $0.05) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -3%

Stop Target:  None

Action:  We are looking for a run past $20 by mid-October and these options have 4 months before they expire.

 

Wells Fargo (WFC, $27.04, down $0.33)  

July 26 puts (WFC110716P00026000, $0.45, up $0.10)

Entry Price:  $0.50 (6/20/11)

Exit Target: $1.00+  

Return:  -10%

Stop Target:  None

Action:  Shares traded to a low of $26.59 before closing just above $27.  Resistance at $28 is holding up like a champ and our target for Wells Fargo is $23 by mid-December.

 

Rambus (RMBS, $14.44, up $0.06)

August 17 calls (RMBS110820C00017000, $0.50, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -17%

Stop Target:  None

Action:  Continue to hold.  


Krispy Kreme Doughnuts (KKD, $9.10, up $0.20)

July 10 calls (KKD110716C00010000, $0.25, flat)

Entry Price:  $0.20 (6/14/11)

Exit Target: $0.40+  

Return:  25%

Stop Target:  None

Action:  Shares kissed $9.13 yesterday and the 52-week high is $9.47.  Once shares crack new highs we should get a run past $10.

 

RealD (RLD, $24.41, up $0.31)       

July 20 puts (RLD110716P00020000, $0.35, down $0.05)

Entry Price:  $0.45 (6/9/11)

Exit Target: $0.90+ (closed half at $1.60 on 6/10/2011)

Return:  115%

Stop Target:  30 cents

Action:  Shares traded to a low of $23.59 but rebounded after a weak open.  We still believe RealD will test $18 over the next 3 weeks.

We have already sold half the position at $1.60 and our entry price was 45 cents.  The gain on the closed half was 256% so even if these puts expire worthless the trade will make 78%.  Because of this, we will probably leave it open until expiration but we do not recommend new positions.


Vivus (VVUS, $7.62, down $0.16) 

September 10 calls (VVUS110917C00010000, $0.25, down $0.05)

Entry Price:  $0.65 (5/20/11)
Exit Target: $1.30
Return:  -62%
Stop Target:  None

Action:  Continue to hold..   


Seattle Genetics (SGEN, $20.22, up $0.21)

September 20 calls (SGEN110917C00020000, $2.55, up $0.05)

Entry Price:  $1.50 (5/9/11)

Exit Target: $3.00 (closed half at $2.20 on 6/8/2011)

Return:  65%

Stop Target:  $1.60 (HARD STOP on other half)

Action:  The FDA will review the company’s cancer drug, brentuximab vedotin, for two cures by mid-July.  The drug is hoping to gain approval to treat Hodgkin lymphoma and sleep apnea disorders. 


Other 2011 Portfolio OPEN positions (6):  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.


eBay July 40 calls (from February 2011)

RF MicroDevices August 10 calls (from February 2011)

Dendreon August 50 calls (from April 2011)

MGM Resorts International September 17 calls (from May 2011)

Rediff.com India October 15 calls (from June 2011)

Darling International July 20 calls (from May 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.


LinkedIn (LNKD, $70.32, up $3.51)

July 55 puts (LNKD110716P00055000, $1.40, down $0.50)

Thoughts:  We are looking for a test back to $73 which is where we may go short again.


Potash (POT, $52.94, up $0.21)

July 55 calls (POT110716C00055000, $0.80, up $0.05)

Thoughts:  If the bulls hold key levels and push higher today then we may play Potash on a rebound back to $55+.


Williams-Sonoma (WSM, $37.60, up $0.24)

July 39 calls (WSM110716C00039000, $0.60, up $0.05)

Thoughts:  We were tempted with these calls at 50 cents.  We also like the August 40 calls which are at $1.


Ancestry.com (ACOM, $40.09, up $1.48)

July 40 calls (ACOM110716C00040000, $1.70, up $0.50)

Thoughts:  These calls have done really well this week and were at 80 cents Wednesday morning.  We missed the boat as far as making it an official recommendation but some of you have emailed us asking what to do.  It’s simple, close half and let the rest ride if you are in.  The July 45 calls are tempting at 30 cents.

The 52-week high is $45-and change and we are looking for a run past $40 as the stock gains momentum.     


Freeport-McMoRan (FCX, $48.94, up $0.08)

July 50 calls (FCX110716C00050000, $1.20, down $0.05)

Thoughts:  These call options traded to a low of 73 cents yesterday.  We may take a flyer on these options as it appears the stock is setting up to make a run past $50.   


SanDisk (SNDK, $42.88, up $0.34)

July 39 puts (SNDK110716P00039000, $0.35, down $0.05)

Thoughts:  We are WAITING for a drop below $40 which should lead to a quick trip to $37. 


S&P 500 Spiders (SPY, $128.30, down $0.37)

July 130 call (SPY110716C00130000, $1.20, down $0.10) 

July 125 put (SPY110716P00125000, $1.20, up $0.10)

Thoughts:  We are almost at the point where this could be a great strangle trade.  At $127.50, let’s see where we are at.