June 2012 | Members

MEMBERS AREA

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.

12:30pm (EST)

NEW TRADE!!!

Potash (POT, $38.08, down $0.30)       

Buy to OPEN July 35 puts (POT120721P00035000, $0.75, up $0.05)

Action:  Use limit orders up to 80 cents but do not pay more than 85-90 cents to establish positions.

 

CURRENT TRADES

iShares Russell 2000 (IWM, $76.40, down $0.57)

July 70 puts (IWM120721P00070000, $0.95, up $0.05)

Entry Price:  $1.20 (6/6/12)
Exit Target: $2.40
Return:  -21%
Stop Target:  60 cents

Action:  The July options have 6 weeks before they expire and the bears will be looking for a close below $75 this week (or next).

 

Veeco Instruments (VECO, $33.85, down $0.75)

July 30 puts (VECO120721P00030000, $1.15, up $0.15)

Entry Price:  $1.00 (6/6/12)
Exit Target: $2.00
Return:  15%
Stop Target:  50 cents

Action:  We would like to see a close below $33.50 today.   

 

Illinois Tool Works (ITW, $55.48, down $0.53) 

July 50 puts (ITW120721P00050000, $0.60, flat)

Entry Price:  $1.05 (6/4/12)
Exit Target: $2.10
Return:  -43%
Stop Target:  None

Action:  We are looking for a drop below $53.50 over the next 2 weeks which will quickly bring $50 into play.

 

Constant Contact (CTCT, $19.74, down $0.26)

July 17.50 puts (CTCT120721P00017500, $0.70, flat)

Entry Price:  $0.55 (5/24/12)
Exit Target: $1.10
Return:  27%
Stop Target:  None

Action:  We are expecting a drop below $18 over the next 6 weeks.  

 

First Solar (FSLR, $12.52, down $0.28)         

July 10 puts (FSLR120721P00010000, $0.50, flat) 

Entry Price:  $0.62 (5/23/12)
Exit Target: $1.20
Return:  -19%
Stop Target:  None

Action:  This company is running out of cash which should get shares to single-digits by mid-July.

 

Apollo Group (APOL, $35.12, up $0.14)

August 27 puts (APOL120818P00027000, $0.50, down $0.05)

Entry Price:  $0.90 (5/10/12)
Exit Target: $1.80
Return:  -44%
Stop Target:  45 cents

Action:  We may add the November 25 puts but we will have to work the bid/ ask which is at 76 cents/ 97 cents.  For new subscribers, we still love the August puts at current levels and may add to them as well.

 

Arena Pharmaceuticals (ARNA, $ ARNA, $7.19, up $0.57)  

July 3 calls (ARNA120723C00003000, $4.10, up $0.30)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+ (closed half on 6/5/12 at $3.40)
Return:  275%
Stop Target:  $3, raise to $3.20 (Hard Stop on other HALF)

Action:  Shares surged past $7 shortly after the open and have traded to a high of $7.23.  We have moved the Hard Stop up to $3.20.  

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 and we did a big update on the company in our last Weekly Wrap.

 

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.

 

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)

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 in the morning.