PowerShares QQQ (QQQ, $64.89, up $0.54)
August 59 puts (QQQ120818P00059000, $0.30, down $0.10)
Entry Price: $0.75 (6/27/12) Exit Target: $1.50 Return: -60% Stop Target: None
Action: We would like to see $65 hold but there is risk to $67. The August options have 43 days before they expire and we are expecting a drop below $60 by then.
AOL (AOL, $28.71, up $0.30)
August 24 puts (AOL120818P00024000, $0.30, down $0.10)
Entry Price: $0.53 (6/26/12) Exit Target: $1.00 Return: -43% Stop Target: None
Action: We said there could be risk up to $30 and shares hit a fresh 52-week high of $28.79 on Tuesday. We are still looking for a test to $26 over the near-term and then $24.
Consumer Discret Select Spider (XLY, $43.87, down $0.04)
August 41 puts (XLY120818P00041000, $0.40, down $0.05)
Entry Price: $0.80 (6/25/12) Exit Target: $1.60 Return: -50% Stop Target: None
Action: There were 1,000 contracts of the August 37 puts which traded on Tuesday which could be a bet by someone expecting lower prices. There is risk to $45 but we are expecting a test to $40 by August.
iShares Dow Jones US Real Estate (IYR, $64.98, up $0.36)
August 57 puts (IYR120818P00057000, $0.30, flat)
Entry Price: $0.85 (6/25/12) Exit Target: $1.70 Return: -78% Stop Target: 40 cents
Action: Shares reached a 52-week high of $65.17 on Tuesday and we expected a test to $65. We are still looking for a drop below $60 by mid-August.
KLA-Tencor (KLAC, $48.96, up $0.01)
August 43 puts (KLAC120818P00043000, $0.55, flat)
Entry Price: $0.90 (6/25/12) Exit Target: $1.80 Return: -39% Stop Target: 45 cents
Action: The 100-day MA is at $49.56 and shares reached $49.50 on Monday. We are expecting a close below $45 over the next week and $40 by mid-August.
Other 2012 Portfolio OPEN positions (11): 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)
Apollo Group August 27 puts (from May 2012)
Best Buy July 16 puts (from May 2012)
First Solar July 10 puts (from May 2012)
FedEx July 77.50 puts (from June 2012)
Potash July 35 puts (from June 2012)
iShares Russell 2000 July 70 puts (from June 2012)
Facebook July 24 puts (from June 2012)
Coinstar July 60 puts (from June 2012)
Illinois Tool Works July 50 puts (from June 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.
Aetna (AET, $38.15, down $0.42)
August 36 puts (AET120818P00036000, $0.90, up $0.15)
Thoughts: Shares could be on the verge of collapsing with a possible test to the lows $30’s. We may add these options if shares fall below $38.
Monster Beverage (MNST, $74.88, up $0.10)
August 60 puts (MNST120818P00060000, $0.80, down $0.10)
August 90 calls (MNST120818C00090000, $0.55, flat)
Thoughts: We like this trade as a possible strangle option trade as we a big move coming for shares of Monster.
WellpointHealth Networks (WLP, $61.28, down $0.98)
August 57.50 puts (WLP120818P00057500, $1.10, up $0.20)
Thoughts: We are looking for a drop below $60, possibly to $55.
McKesson (MCK, $95.67, up $0.64)
July 95 calls (MCK120721C00095000, $1.50, up $0.40)
Thoughts: This is a possible choice for a healthcare play as shares are near a decade high. The chart is showing a possible breakout to blue-sky territory and could reach triple-digits.
Freeport-McMoRan Copper & Gold (FCX, $35.21, up $1.33)
August 33 puts (FCX120818P00033000, $0.95, down $0.55)
Thoughts: We like this trade and would like to see a test to $35 which is where we might give Freeport another ride.
Schlumberger (SLB, $67.34, up $2.40)
August 60 puts (SLB120818P00060000, $0.75, down $0.55)
Thoughts: We may be getting an opportunity for a quick trade so stay ready.