9:00am (EST)

Special Note:  The charts from yesterday have been posted for those of you who may not have checked them last night.

 

Facebook (FB, $31.41, up $1.40)

July 24 puts (FB120721P00024000, $0.25, down $0.15)

Entry Price:  $0.65 (6/14/12)

Exit Target: $1.05-$1.30

Return:  -62%

Stop Target:  None

Action:  Needless to say, we aren’t happy with how this trade has started off as we felt $28 would hold but we failed to factor in
June option expiration.  Yesterday’s action pushed $32 but shares faded at resistance.  These options have over 4 weeks before they
expire.  

 

FedEx (FDX, $88.51, up $0.88)

July 77.50 puts (FDX120721P00077500, $0.50, down $0.30)

Entry Price:  $0.92 (6/12/12)

Exit Target: $1.95

Return:  -46%

Stop Target:  45 cents

Action:  FedEx beat estimates but they took a charge and lowered guidance going forward.  Shares are down nearly $2 in early morning trading so we should see a pop on our puts.     

 

Potash (POT, $38.99, up $0.39)       

July 35 puts (POT120721P00035000, $0.40, down $0.15)

Entry Price:  $0.75 (6/11/12)

Exit Target: $1.50

Return:  -47%

Stop Target:  None

Action:  There is risk up to $40 but we are looking for a drop below $35 by mid-July. 

 

iShares Russell 2000 (IWM, $77.31, up $0.09)

July 70 puts (IWM120721P00070000, $0.50, down $0.25)

Entry Price:  $1.20 (6/6/12)

Exit Target: $2.40

Return:  -58%

Stop Target:  60 cents

Action:  Share traded up to $77.60 and we are looking for $78 to hold.  If so, we would like to see a move towards $75 over the next few weeks.

 

Veeco Instruments (VECO, $33.26, down $0.02)

July 30 puts (VECO120721P00030000, $0.80, down $0.20)

Entry Price:  $1.00 (6/6/12)

Exit Target: $2.00

Return:  -20%

Stop Target:  50 cents

Action:  Our puts lost a little premium despite shares trading down to $32.75.   We are looking for a drop below $30 over the near-term, $25 by mid-July.  A move above $34, which has been solid as resistance, would be bullish.

 

Illinois Tool Works (ITW, $54.43, down $0.05) 

July 50 puts (ITW120721P00050000, $0.45, down $0.15)

Entry Price:  $1.05 (6/4/12)

Exit Target: $2.10

Return:  -52%

Stop Target:  None

Action:  Shares traded down to $54 yesterday and we are looking for a drop below $53 this week.  This should lead to a quick trip to $50 or worse.

 

Apollo Group (APOL, $33.21, up $0.09)

August 27 puts (APOL120818P00027000, $0.60, down $0.20)

Entry Price:  $0.90 (5/10/12)

Exit Target: $1.80

Return:  -33%

Stop Target:  45 cents

Action:  A rising tide will lift all boats.  Shares fell to a low of $32.57 but ended positive.  We are looking for a drop below $32 this week.

 

Arena Pharmaceuticals
(ARNA, $9.38, up $0.98)  

July 3 calls (ARNA120723C00003000, $6.50, up $1.00)

Entry Price:  $1.00 (4/30/12)

Exit Target: $2+ (closed half on 6/5/12 at $3.40)

Return:  395%

Stop Target:  $4.50, raise to $5.50 (HARD STOP on other half)

Action:  Shares tested a high of $9.55 and we may close a quarter of the remaining half position to lock-in further profits once $10 trips.  We have raised the Hard Stop to $5.50 in case shares slip from here.

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.

 

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)

First Solar July 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.

 

 

Freeport-McMoRan
Copper & Gold

(FCX, $34.26, down $0.08)

 

July 30 puts
(FCX120721P00030000, $0.45, down $0.10)

 

August 29 puts
(FCX120818P00029000, $0.60, down $0.10)

 

Thoughts:  A move above $35 would be bullish but we are
expecting a test to $30 over the near-term and the mid-$20’s by August.  The 52-week low is $28.85.

 

 

Coinstar (CSTR, $64.76, up $1.95)   

 

July 55 puts
(CSTR120721P00055000, $0.40, down $0.25)

 

July 57.50 puts
(CSTR120721P00057500, $0.65, down $0.45)

 

Thoughts:  Resistance at $65 has held up well but we are
looking for a drop below $60 over the next month or 2.

 

 

KLA-Tencor (KLAC, $49.42, up $1.11)

 

July 45 puts
(KLAC120721P00045000, $0.45, down $0.20)

 

September 37 puts (KLAC120922P00037000, $0.50, down $0.10)

 

Thoughts:  We would like to see a
quick pop to $50 which is where we might start half positions as we expect a
drop to $44 or worse over the next few months. 
 

 

 

Schlumberger (SLB, $66.54, up $0.08)  

 

July 57.50
(SLB120721P00057500, $0.40, down $0.20)

 

August 55 puts
(SLB120818P00055000, $0.65, down $0.20)

 

Thoughts:  We said shares
could test $67 on fluff.  We like the
July 57.50’s if this level holds over the next day or two. 

 

 

PowerShares QQQ (QQQ, $63.58, up $0.59)

 

July 60 puts
(QQQ120721P00060000, $0.45, down $0.25)

 

Thoughts:  Watch for
now.