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 “Profit 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.

12:25pm (EST)

Alcoa (AA, $11.61, up $0.41)

November 12 calls (AA111119C00012000, $0.32, up $0.12)

Entry Price:  $0.18 (10/28/11)
Exit Target: $0.36
Return:  78%
Stop Target:  None

December 13 calls (AA111217C00013000, $0.23, up $0.07)

Entry Price:  $0.15 (10/28/11)
Exit Target: $0.36
Return:  53%
Stop Target:  None

Action:  Shares are up 4% today so we need to take advantage of the pop!  Close HALF of the November 12 call options to lock in a 78% return in 3 hours!

The November 12 calls opened at 18 cents and the December 13 calls opened at 15 cents.  We had listed the wrong price quote for the December calls as we had the quote for the 12’s but everyone should be in the 13’s.  This is a layered trade and we think the demand for aluminum has been picking up.      

Vivus (VVUS, $9.26, up $0.03)     

December 10 calls (VVUS111217C00010000, $0.55, up $0.05)

Entry Price:  $0.50 (10/28/11)
Exit Target: $1.00
Return:  10%
Stop Target:  None

March 12 calls 2012 (VVUS120317C00012000, $1.70, up $0.15)

Entry Price:  $1.55 (10/28/11)
Exit Target: $3.10
Return:  10%
Stop Target:  75 cents

Action:  We did a recent write-up in our Weekly Wrap on Vivus and we will run it for you again on Monday.

Molex (MOLX, $25.42, down $0.47)

November 25 calls (MOLX111119C00025000, $1.35, down $0.25)  

Entry Price:  $0.80 (10/26/11)
Exit Target: $1.60
Return:  69%
Stop Target:  $1.00 (HARD STOP)

Action:  Let’s close the trade at current levels to take a little risk off the table before the weekend.

Taiwan Semiconductor Manufacturing (TSM, $12.79, down $0.13)

December 12.50 calls (TSM111217C00012500, $0.75, down $0.10)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  50%
Stop Target:  50 cents

Action:  The 52-week high is $14 which we expect to challenge over the next 2 months.  At $14, the options would be worth at least $1.50 so there is a chance we could make 200% with this trade.

Pepsico (PEP, $63.11, up $0.79)

January 65 calls (PEP120121C00065000, $0.90, up $0.05)

Entry Price:  $0.70 (10/24/11)
Exit Target: $2.40
Return:  29%
Stop Target:  None 

Action:  Shares got an upgrade this morning?

Qualcomm (QCOM, $53.71, down $0.81)

November 57.50 calls (QCOM111119C00057500, $0.50, down $0.05)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -47%
Stop Target:  None

Action:  The company will announce earnings next Wednesday.

Potash (POT, $50.92, flat)

November 52.50 calls (POT111119C00052500, $1.25, flat)

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  4%
Stop Target:  None

Action:  If shares can reach $55 over the next 3 weeks this trade will be a double as the options would be worth at least $2.50.

Rambus (RMBS, $17.75, down $0.30)

November 16 calls (RMBS111119C00016000, $3.05, down $0.30)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  27% 
Stop Target:  $2.45

Action:  We are keeping this trade open as we continue to wait for the company’s current litigation issues to play out.  A favorable ruling today or next could easily push the stock past $20 which means the options will trade at $4 or $5.  We may use some December options as a “piggy-back” if shares break $19.         

Spreadtrum Communications (SPRD, $25.97, up $0.61)     

January 25 calls (SPRD120121C00025000, $3.50, up $0.50)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  113%
Stop Target:  $2

Action:  The company reports earnings on November 9 and we may also “piggy-back” this trade depending on how shares are acting on Monday.  

Other 2011 Portfolio OPEN positions (3):  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.

JDSU Uniphase January 20 calls (from August 2011)
                     January 16 calls (from August 2011)
Lufkin Industries December 80 calls (from September 2011)

Seattle Genetics November 17.50 puts (from October 2011)


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 be back with a fresh list and updates on Monday.