Apollo Group (APOL, $26.46, down $0.09)
October 24 puts (APOL121020P00024000, $1.07, up $0.02)
Entry Price: $1.16 (8/28/12)
Exit Target: $2.30
Stop Target: 60 cents
September 24 puts (APOL120922P00024000, $0.31, down $0.04)
Entry Price: $1.10 (7/31/12)
Exit Target: $2.20
Stop Target: None
Action: Shares traded down to $25.98 yesterday and the 52-week low of $25.77 was hit at the beginning of the month. The company will announce earnings in mid-October and we are expecting shares to drift below $25 over the next few weeks. Our near-term target is $20 but our longer-term target remains the low teens.
The September options are from late July and have been inching up over the past couple of weeks but we are still down on the trade. We had an earlier Apollo trade from this year that was down over 70% going into August that came back to make us nearly 70% so we are hopeful the September options do the same.
Cymer (CYMI, $55.74, down $1.01)
September 55 puts (CYMI120922P00055000, $1.70, up $0.30)
Entry Price: $1.42 (8/23/12)
Exit Target: $2.25+
Stop Target: 70 cents
Action: Our near-term target is $50 and we would love to see a close below double-nickels today.
Caterpillar (CAT, $84.47, down $1.62)
September 82.50 puts (CAT120922P00082500, $1.40, up $0.40)
Entry Price: $0.73 (8/23/12)
Exit Target: $1.50 (closed half at $1.30 on 8/29/12)
Stop Target: $1.05 (Hard Stop)
Action: Shares finished at session lows and closed below $85. This sets up a test down to $80.
Knight Capital Group (KCG, $2.79, down $0.01)
January (2013) 2.50 call (KCG130119C00002500, $0.50, flat)
Entry Price: $0.55 (8/21/12)
Exit Target: $1.10
Stop Target: None
Action: We would like to see shares close above $3 over the next few weeks but there is still risk down to $2. If shares trade near $4 by mid-January we will get an easy double or triple on our call options.
Pepsico (PEP, $72.18, down $0.60)
October 75 calls (PEP121020C00075000, $0.35, down $0.10)
Entry Price: $0.50 (8/16/12)
Exit Target: $1.00
Stop Target: None
Action: There is risk down to $72 and these are cheap out-of-the-money options. If shares trade to $76 we will at least double our money and we would like to have a few call options open in case there is a rally. These are October options so we have 49 days to wait for a possible run to $80.
Other 2012 Portfolio OPEN positions (5): 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.
Dow Jones Industrial Average Spiders September 119 puts (from July 2012)
S&P 500 Spiders September 123 puts (from July 2012)
Wynn Resorts September 80 puts (from August 2012)
Veeco Instruments September 30 puts (from August 2012)
Bank of America January 12.50 calls 2013 (from March 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.
Silver Wheaton (SLW, $32.89, down $0.50)
September 35 calls (SLW120922C00035000, $0.45, down $0.15)
September 30 puts (SLW120922P00030000, $0.33, up $0.08)
October 35 calls (SLW121020C00035000, $1.05, down $0.15)
Thoughts: Shares could make a run to $40 over the next few months if silver stays strong. If not, shares could fall back below $30.
Amgen (AMGN, $83.15, down $0.57)
September 85 calls (AMGN120922C00085000, $0.65, down $0.20)
October 87.50 calls (AMGN121020C00087500, $0.85, down $0.10)
Thoughts: There is risk down to $81 which is where we would love to reestablish a position but we might jump on the October 87.50’s if shares close above $85.
AOL (AOL, $33.71, down $0.03)
September 33 calls (AOL120922C00033000, $1.20, down $0.10)
September 33 puts (AOL120922P00033000, $0.70, up $0.10)
Thoughts: Continue to watch.
Netflix (NFLX, $60.48, down $2.96)
September 65 calls (NFLX120922C00065000, $1.20, down $1.00)
September 55 puts (NFLS120922P00055000, $0.95, up $0.40)
Thoughts: Watch for a break above $67 before going long. A move below $62.50 would be bearish.
Fusion-io (FIO, $27.91, down $1.24)
September 30 calls (FIO120922C00030000, $0.55, down $0.40)
September 26 puts (FIO120922P00026000, $0.65, up $0.35)
Thoughts: Momentum could be fading so we have added some put options.
Broadcom (BRCM, $34.99, down $0.67)
September 36 calls (BRCM120922C00036000, $0.60, down $0.20)
September 33 puts (BRCM120922P00032000, $0.40, up $0.15)
Thoughts: The 52-week high is $39.66. We would wait until shares clear $36 before going long and on a break below $34 we might look to go short.
Akamai Technologies (AKAM, $37.31, down $0.37)
September 38 calls (AKAM120922C00038000, $0.90, down $0.10)
November 45 calls (AKAM121117C00045000, $0.70, down $0.10)
January 45 calls (AKAM130119C00045000, $1.25, down $0.10)
Action: A close below $37 would be bearish and could get $35 in play while a break above $38-$39 could send shares into blue-sky territory.