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.

12:25pm (EST)

Facebook (FB, $28.66, up $0.37)

July 24 puts (FB120721P00024000, $0.50, down $0.10)

Entry Price:  $0.65 (6/14/12)
Exit Target: $1.05-$1.30
Return:  -23%
Stop Target:  None

Action:  There is risk up to $30 but shares are fading off their highs.  We believe shares will be below $25 by mid-July.  

 

FedEx (FDX, $87.20, up $0.36)

July 77.50 puts (FDX120721P00077500, $0.90, down $0.10)

Entry Price:  $0.92 (6/12/12)
Exit Target: $1.95
Return:  -2%
Stop Target:  45 cents

Action:  There is risk up to $90 and we would like to see a close below $85.50 today.  We are looking for a test down to $80 or worse by mid-July.    

 

Potash (POT, $38.66, up $0.75)       

July 35 puts (POT120721P00035000, $0.60, down $0.20)

Entry Price:  $0.75 (6/11/12)
Exit Target: $1.50
Return:  -20%
Stop Target:  None

Action:  We are looking for a drop below $37.50 today, $35 by mid-July. 

 

iShares Russell 2000 (IWM, $76.68, up $0.48)

July 70 puts (IWM120721P00070000, $0.85, down $0.10)

Entry Price:  $1.20 (6/6/12)
Exit Target: $2.40
Return:  -29%
Stop Target:  60 cents

Action:  There is risk up to $78 and we would like to see a move below $76-$75 into the weekend.   

 

Veeco Instruments (VECO, $32.97, up $0.20)

July 30 puts (VECO120721P00030000, $1.10, down $0.15)

Entry Price:  $1.00 (6/6/12)
Exit Target: $2.00
Return:  10%
Stop Target:  50 cents

Action:  Veeco dropped to a low of $32.11 at the open before trading up to $33.19.  Shares still closed below $33 and we would like to see a finish below $32 today. 

 

Illinois Tool Works (ITW, $54.11, up $0.03) 

July 50 puts (ITW120721P00050000, $0.80, flat)

Entry Price:  $1.05 (6/4/12)
Exit Target: $2.10
Return:  -24%
Stop Target:  None

Action:  We are looking for a drop below $53.50 today or by next week.  Once there, this should lead to a quick trip to $50 or below.

 

First Solar (FSLR, $13.68, up $0.23)

July 10 puts (FSLR120721P00010000, $0.35, down $0.05) 

Entry Price:  $0.62 (5/23/12)
Exit Target: $1.20
Return:  -44%
Stop Target:  None

Action:  We would like to see a close below $13 today.  These are cheap options on a volatile stock so try not to get frustrated as we wait for a drop to single-digits.

 

Apollo Group (APOL, $32.80, down $0.15)

August 27 puts (APOL120818P00027000, $0.80, flat)

Entry Price:  $0.90 (5/10/12)
Exit Target: $1.80
Return:  -6%
Stop Target:  45 cents

Action:  We said a close below $33 would get $30 in play so let’s see how it plays out.  If this level is taken out shares could fall to the low $20’s.  For those of you who haven’t pulled the trigger on this trade, do so before it’s too late.    

 

Arena Pharmaceuticals (ARNA, $8.24, up $0.16)  

July 3 calls (ARNA120723C00003000, $5.40, up $0.20)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+ (closed half on 6/5/12 at $3.40)
Return:  340%
Stop Target:  $4.50 (HARD STOP on other half)

Action:  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.  For those of you just joining us, the company will meet with the FDA on June 27.

 

Other 2012 Portfolio OPEN positions (4):  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.

RealD June 10 puts (from May 2012) – unless shares fall off a cliff, this trade will expire today.  We hate losing trades as much as you do and we should have went with the July options which would have given this trade more time to play out.

 

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

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

Best Buy July 16 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 on Monday with some fresh ideas.