June 2012 | 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 a “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.

1:30pm (EST)

NEW TRADES!!!

iShares Russell 2000 (IWM, $76.33, up $1.73)

Buy to OPEN July 70 puts (IWM120721P00070000, $1.20, down $0.50)

Action:  Use limit orders up to $1.25 but do not pay over $1.30-$1.35 to establish positions.

 

Veeco Instruments (VECO, $34.79, up $0.04)

Buy to OPEN July 30 puts (VECO120721P00030000, $1.00, down $0.45)

Action: Use limit orders up to $1.05 but do not pay more than $1.10-$1.15 to establish positions.

 

CURRENT TRADES

Illinois Tool Works (ITW, $55.03, up $0.84)  

July 50 puts (ITW120721P00050000, $1.10, down $0.05)

Entry Price:  $1.05 (6/4/12)
Exit Target: $2.10
Return:  -19%
Stop Target:  None

Action:  We mentioned this morning there could be a run to $55-$57.50 if the market remained bullish but these options have 44 days before they expire. 

 

KLA-Tencor (KLAC, $46.30, up $1.33)

July 42 puts (KLAC120721P00042000, $0.70, down $0.30)

Entry Price:  $0.85 (5/30/12)
Exit Target: $1.70 (closed half on 6/1/12 at $1.30, closed half on 6/6/12 at $0.90)
Return:  29%
Stop Target:  90 cents (Hard Stop)

Action:  The puts opened at 90 cents so our Hard Stop was triggered on the other half of the trade.  Our average closing price came out to $1.10 and the trade made nearly 30% in a week.  We will be back to trade this name again.    

 

Constant Contact (CTCT, $21.30, up $0.46)

July 17.50 puts (CTCT120721P00017500, $0.45, down $0.20)

Entry Price:  $0.55 (5/24/12)
Exit Target: $1.10
Return:  -18%
Stop Target:  None

Action:  We will stick with the trade as long as $22 holds.  We have a near-term target of $18 and a mid-July target of $15.

 

First Solar (FSLR, $13.44, up $0.79)         

July 10 puts (FSLR120721P00010000, $0.50, down $0.15) 

Entry Price:  $0.62 (5/23/12)
Exit Target: $1.20
Return:  -19%
Stop Target:  65 cents

Action:  Continue to hold for now.  

 

Best Buy (BBY, $19.81, up $0.64)

July 16 puts (BBY120721P00016000, $0.30, down $0.05)

Entry Price:  $0.85 (5/21/12)
Exit Target: $1.70
Return:  -65%
Stop Target:  None

Action:  Resistance at $20 should hold if there is further strength this week.  Our near-term price target is for a test down to $15 and our breakeven point is $15.15.  Longer-term we have a price target of $12.50 for shares of Best Buy.   

 

Apollo Group (APOL, $34.89, up $2.20)

August 27 puts (APOL120818P00027000, $0.60, down $0.30)

Entry Price:  $0.90 (5/10/12)
Exit Target: $1.80
Return:  -33%
Stop Target:  45 cents

Action:  Shares are testing the second layer of resistance at $35 which we are expecting to hold.   

 

Arena Pharmaceuticals (ARNA, $6.42, up $0.15)  

July 3 calls (ARNA120723C00003000, $3.40, down $0.10)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+ (closed half on 6/5/12 at $3.40)
Return:  240%
Stop Target:  $3 (Hard Stop on other HALF)

Action:  Continue to hold.  We have a price target of $10+ if there is no delay with their obesity drug, Lorcaserin, which could go to market by the end of the year if all goes well.

 

Other 2012 Portfolio OPEN positions (2):  These are trades that are still open in the portfolio but are down over 50%.  They have longer expiration dates and 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 if the options expire.  Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.

E*Trade Financial July 12 calls (from March 2012)

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012)

RealD June 10 puts (from May 2012)

 

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 but these are the trades we are watching as new candidates.

We will update this section in the morning.