August 2012 | Members

Do not risk more than 5% of your trading account on any one trade but do try to take ALL of the trades.  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.

12:25pm (EST)

Cymer (CYMI, $56.79, up $0.19)

September 55 puts (CYMI120922P00055000, $1.50, down $0.10)

Entry Price:  $1.42 (8/23/12)
Exit Target:  $2.25+
Return:  6%
Stop Target:  70 cents

Action:  Shares have traded to a low of $56.28 today.  We got in on the break below $58 which we are looking to hold as resistance.  If not, a test to $60 could be in the mix and where we might exit the trade.  We are looking for a near-term drop to $55 and a close below this level could lead to a test to the low $50’s.

 

Caterpillar (CAT, $87.05, down $0.42)

September 82.50 puts (CAT120922P00082500, $0.85, up $0.05)

Entry Price:  $0.73 (8/23/12)
Exit Target:  $1.50
Return:  16%
Stop Target:  None

Action:  CAT has touched a low of 86.54 while the options have reached 90 cents.  We are looking for shares to test $80 again once $85 and the 50-day MA is taken out.

 

Knight Capital Group (KCG, $2.79, down $0.01)

January (2013) 2.50 call (KCG130119C00002500, $0.55, flat)

Entry Price:  $0.55 (8/21/12)
Exit Target:  $1.10
Return:  0%
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.

 

WellPoint (WLP, $58.09, up $0.43)

September 60 calls (WLP120922C00060000, $0.65, up $0.05)

Entry Price:  $0.70 (8/21/12)
Exit Target:  $1.40
Return:  -7%
Stop Target:  None

Action:  We would like to see shares start the week with a close above $58 which should get $60 into play.  From there, a push to $64 could be in play.  We will stick with the trade as long as $56 holds but we will likely close the trade on a drop below $55.

 

Amgen (AMGN, $85.02, up $0.43)       

September 85 calls (AMGN120922C00085000, $1.60, up $0.20)

Entry Price:  $0.80 (8/20/12)
Exit Target:  $1.50 (closed half at $1.10 on 8/22/12)
Return:  69%
Stop Target:  80 cents, raise to $1.00 (Hard Stop on other half)

Action:  Continue to hold.

 

Pepsico (PEP, $73.65, up $0.59)

October 75 calls (PEP121020C00075000, $0.65, up $0.10)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  30%
Stop Target:  None

Action:  The close back above $73 on Friday was bullish and we are still looking for a run to $80 over the next few months if the market remains bullish.  We may exit the trade on any weakness or on a drop below $72.     

 

Veeco Instruments (VECO, $33.22, up $0.20)

September 30 puts (VECO120922P00030000, $0.60, down $0.10)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.35-$1.80
Return:  -33%
Stop Target:  None

Action:  We would like to see a close below $32 this week which should get $30 and the 200-day MA in play.

 

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)  

Apollo Group September 24 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.

We will update this section in the morning.