October 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.

12:55pm (EST)

PowerShares QQQ (QQQ, $55.95, down $0.95)

November 58 calls (111119C00058000, $1.10, down $0.30)

Entry Price:  $1.60 (10/19/11)
Exit Target: $2.40
Return:  -31%
Stop Target:  80 cents 

Action:  While we may drift lower, the mother of all rallies could come next week if Europe’s top brass can pull off a miracle and come up with a “concrete plan”.  This is a high risk/ high reward trade so we aren’t worried about the volatility.


Qualcomm (QCOM, $51.91, down $0.69)

November 57.50 calls (QCOM111119C00057500, $0.60, down $0.10)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -37%
Stop Target:  None

Action:  Qualcomm traded higher for much of the morning but is being dragged down with the overall market.  We still like the position.


Potash (POT, $47.31, down $0.53)

November 52.50 calls (POT111119C00052500, $0.80, down $0.10)

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  -33%
Stop Target:  None

Action:  There is a lot of chatter with the agriculture stocks today and we still expect shares to be at $55 by mid-November.


SanDisk (SNDK, $45.34, up $0.16)

November 50 calls (SNDK111119C00050000, $1.10, up $0.10)

Entry Price:  $1.30 (10/13/11)
Exit Target: $2.60

Return:  -15%
Stop Target: $1.05

Action:  Shares have traded to a high of $47.27 and the options have traded up to $1.58 today.  SanDisk will announce after the bell.  Wall Street is expecting $1.02 but we are hearing whisper numbers as high as $1.15.  We are going to gamble and leave the trade open.  


O’Reilly Automotive (ORLY, $70.08, up $0.19)

November 75 calls (ORLY111119C00075000, $0.60, flat)

Entry Price:  $0.55 (10/10/11)
Exit Target: $1.10
Return:  9% 
Stop Target:  None

Action:  Continue to hold.


Seattle Genetics (SGEN, $20.30, down $0.04)

November 17.50 puts (SGEN111119P00017500, $0.65, flat)

Entry Price:  $0.60 (10/5/11)
Exit Target: $1.20

Return:  8%
Stop Target: None

Action:  The low is $20.13 today and we are expecting a break below $20.   


Rambus (RMBS, $15.93, down $0.51)

November 16 calls (RMBS111119C00016000, $3.05, down $0.45)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  27% 
Stop Target:  $2.45

Action:  Close HALF of the trade now

Rambus will announce after the bell and we want to take a little risk off the table by closing half of the trade.  We aren’t worried about the numbers as we continue to look forward to a favorable ruling in their current litigation case which is in the fifth week of deliberations.  Because we are playing with much higher premiums than normal, we would rather be safe than sorry.      


Spreadtrum Communications (SPRD, $22.06, up $0.17)

January 25 calls (SPRD120121C00025000, $1.90, flat)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  27%
Stop Target:  $1.05

Action:  Buy to OPEN the November 24 calls (SPRD111119C00024000, $1.00, up $0.10) by using limit prices up to $1.10.  Do not pay over $1.20 to get filled. 

The company doesn’t announce earnings until mid-November so we don’t have an event risk to worry about and we like the break above $22 today.
 

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.

Symantec October 20 calls (from June 2011)
Rediff.com India October 15 calls (from June 2011)
Qualcomm October 65 calls (from July 2011)
Clean Energy October 15 calls (from August 2011)
JDSU Uniphase January 20 calls (from August 2011)
                     January 16 calls (from August 2011)
Lufkin Industries December 80 calls (from September 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 in the morning.