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.

12:30pm (EST)

Cymer (CYMI, $57.04, up $0.04)

September 55 puts (CYMI120922P00055000, $1.30, down $0.10)

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

Action:  Our near-term target is $50 and we expect $58 to hold as resistance.

 

Caterpillar (CAT, $86.37, down $0.26)

September 82.50 puts (CAT120922P00082500, $0.95, up $0.05)

Entry Price:  $0.73 (8/23/12)
Exit Target:  $1.50
Return:  30%
Stop Target:  None

Action:  We would like to see a close below $85 over the next day or two which is where we are looking to lock-in at least half profits.  A test to $80 again is certain once $85 and the 50-day MA is taken out.

 

Knight Capital Group (KCG, $2.75, down $0.03)

January (2013) 2.50 call (KCG130119C00002500, $0.50, down $0.05)

Entry Price:  $0.55 (8/21/12)
Exit Target:  $1.10
Return:  -9%
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, $57.68, down $0.48)

September 60 calls (WLP120922C00060000, $0.50, down $0.15)

Entry Price:  $0.70 (8/21/12)
Exit Target:  $1.40
Return:  -29%
Stop Target:  None

Action:  Continue to hold.

 

Pepsico (PEP, $73.31, up $0.14)

October 75 calls (PEP121020C00075000, $0.55, flat)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  10%
Stop Target:  None

Action:  Continue to hold.  If shares trade to $76 we will at least double our money.  These are October options so we have plenty of time to play a possible run to $80. 

 

Veeco Instruments (VECO, $33.77, up $0.32)

September 30 puts (VECO120922P00030000, $0.45, down $0.10)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.35-$1.80
Return:  -50%
Stop Target:  None

Action:  We are looking for resistance to hold at $34 and 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.

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11:00am (EST)

Amgen (AMGN, $84.44, up $0.01)       

September 85 calls (AMGN120922C00085000, $1.25, flat)

Entry Price:  $0.80 (8/20/12)
Exit Target:  $1.50 (closed half at $1.10 on 8/22/12)
Return:  35%
Stop Target:  $1.10 (Hard Stop on other half)

Action:  We were stopped out at the open on the other half of our trade as the options opened at $1.06.  We will keep Amgen on our Watch List as shares continue to push 52-week highs and we will list some October calls to play possible further upside movement.

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9:00am (EST)

Special Note:  With a 3-day weekend coming up, the September options will have less than 3 weeks before they expire once trading starts next Tuesday.  This is usually a time period we call the “Danger Zone” because time premiums start to get whacked.  Although we don’t go too far out-of-the-money on our trades, volatility will also increase as positions can gain or lose a lot of ground. 

We will have plenty of time to play a breakout or breakdown and we have outlined key pivot points for the market.  It will be safer for us to take what winners the market gives us this week which will leave us with a light portfolio and ready to play the big next trend.

We have closed 10 out-of-our-last 11 trades for sweet gains so let’s keep the momentum going.  Stay ready this morning for possible Trade Alerts between 10am-11am (EST) if we take action.  Otherwise, we will see you around lunchtime.

 

Cymer (CYMI, $57.00, up $0.40)

September 55 puts (CYMI120922P00055000, $1.40, down $0.20)

Entry Price:  $1.42 (8/23/12)
Exit Target:  $2.25+
Return:  -1%
Stop Target:  70 cents

Action:  Shares traded to a low of $56.28 yesterday and our near-term target is $50.  However, Cymer rebounded to trade to a high of $57.15 and is still under $58 which we are expecting to hold as resistance.

 

Caterpillar (CAT, $86.63, down $0.84)

September 82.50 puts (CAT120922P00082500, $0.90, up $0.10)

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

Action:  Shares raced to $88 at the open as our options dipped to 71 cents but reversed course and kissed a low of $86.54 quickly afterwards.  We would like to see a close below $85 over the next day or two which is where we are looking to lock-in at least half profits.  A test to $80 again is certain once $85 and the 50-day MA is taken out.

 

Knight Capital Group (KCG, $2.78, down $0.02)

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, $58.16, up $0.50)

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 got our close above $58 which should get $60 into play.  Shares made an intraday high of $58.46 as the options traded up 71 cents yesterday.

 

Amgen (AMGN, $84.43, down $0.16)       

September 85 calls (AMGN120922C00085000, $1.25, down $0.15)

Entry Price:  $0.80 (8/20/12)
Exit Target:  $1.50 (closed half at $1.10 on 8/22/12)
Return:  47%
Stop Target:  $1.00, raise to $1.10 (Hard Stop on other half)

Action:  We certainly didn’t like the way shares folded after hitting a fresh 52-week peak of $85.28 yesterday.  The options traded to a low of $1.16 following the pullback and we have raised the Hard Stop to $1.10 on the other half in case there is continued weakness into today.

 

Pepsico (PEP, $73.17, up $0.11)

October 75 calls (PEP121020C00075000, $0.55, flat)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  10%
Stop Target:  None

Action:  Pepsi also hit a fresh 52-week high after trading to $73.66 while the options reached 64 cents.  If shares trade to $76 we will at least double our money.  These are October options so we have plenty of time to play a possible run to $80. 

        

Veeco Instruments (VECO, $33.45, up $0.43)

September 30 puts (VECO120922P00030000, $0.55, down $0.15)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.35-$1.80
Return:  -39%
Stop Target:  None

Action:  We are looking for resistance to hold at $34 and 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.

 

AOL (AOL, $33.86, up $0.94)

September 33 calls (AOL120922C00033000, $1.40, up $0.60)

September 32 puts (AOL120922P00032000, $0.30, down $0.30)

Thoughts:  We said this might make a great strangle option trade and yesterday’s push to all-time highs nearly doubled the call options.

 

Netflix (NFLX, $62.39, down $0.77)

September 70 calls (NFLX120922C00070000, $0.80, down $0.20)

Thoughts:  Watch for a break above $67 before going long.  A move below $62.50 would be bearish.

 

Fusion-io (FIO, $29.10, down $0.02)

September 32 calls (FIO120922C00032000, $0.65, flat)

Thoughts:  A break above $30 might get us back in these call options to play a run to $32.  A move below $27 would be bearish.

 

Broadcom (BRCM, $35.42, up $0.07)

September 36 calls (BRCM120922C00036000, $0.70, flat)

September 33 puts (BRCM120922P00032000, $0.40, flat)

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, $37.24, up $0.14)

September 38 calls (AKAM120922C00038000, $0.90, flat)

November 45 calls (AKAM121117C00045000, $0.70, flat)

January 45 calls (AKAM130119C00045000, $1.25, flat)

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.