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.

12:10pm (EST)

Cymer (CYMI, $56.97, up $0.03)

September 55 puts (CYMI120922P00055000, $1.40, flat)

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

Action:  Shares have traded down to $56.47 today.  Our near-term target is $50.

 

Caterpillar (CAT, $84.73, down $1.28)

September 82.50 puts (CAT120922P00082500, $1.30, up $0.30)

Entry Price:  $0.73 (8/23/12)
Exit Target:  $1.50
Return:  78%
Stop Target:  None

Action:  Close HALF of the trade at current levels.  The options have traded to a high of $1.43 but we want to lock-in profits on half the trade now that shares are below $85.

 

Knight Capital Group (KCG, $2.72, down $0.03)

January (2013) 2.50 call (KCG130119C00002500, $0.50, flat)

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, $61.90, up $4.51)

September 60 calls (WLP120922C00060000, $2.60, up $2.15)  

Entry Price:  $0.70 (8/21/12)
Exit Target:  $1.40, raise to $3 (closed half at $2.20 on 8/29/12)
Return:  243%
Stop Target:  $1.50 (Hard Stop on other half)

Action:  We closed half of the trade at $2.20 earlier today and we will continue to enjoy further gains if shares keep trending higher.  The options opened at $1.55 and have traded to a high of $2.90.  We will set a Hard Stop of $1.50 on the other half of the trade.

 

Pepsico (PEP, $72.85, down $0.27)

October 75 calls (PEP121020C00075000, $0.50, flat)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  0%
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.    

 

Other 2012 Portfolio OPEN positions (6):  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)

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.

We will update this section in the morning.

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10:15am (EST)

WellPoint (WLP, $61.25, up $3.86)

September 60 calls (WLP120922C00060000, $2.20, up $1.75)

Entry Price:  $0.70 (8/21/12)
Exit Target:  $1.40
Return:  214%
Stop Target:  None

Action:  Close HALF of the trade at current levels.

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9:00am (EST)

Cymer (CYMI, $56.94, down $0.06)

September 55 puts (CYMI120922P00055000, $1.40, flat)

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

Action:  Shares traded to a high of $57.33 and resistance at $58 held.  Our near-term target is $50.

 

Caterpillar (CAT, $86.01, down $0.62)

September 82.50 puts (CAT120922P00082500, $1.00, up $0.10)

Entry Price:  $0.73 (8/23/12)
Exit Target:  $1.50
Return:  37%
Stop Target:  None

Action:  We would like to see a close below $85 by the end of the week which is where we are looking to lock-in at least half profits.  Shares traded down to $85.88 yesterday.  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, $57.39, down $0.77)

September 60 calls (WLP120922C00060000, $0.45, down $0.20)

Entry Price:  $0.70 (8/21/12)
Exit Target:  $1.40
Return:  -36%
Stop Target:  None

Action:  There is risk down to $55 which is where we will cut our losses but we still believe shares will push $60.

 

Pepsico (PEP, $73.12, down $0.05)

October 75 calls (PEP121020C00075000, $0.50, down $0.05)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  0%
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. 

       

Other 2012 Portfolio OPEN positions (6):  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)

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.

 

Amgen (AMGN, $84.01, down $0.42)      

September 85 calls (AMGN120922C00085000, $1.00, down $0.25)

October 87.50 calls (AMGN121020C00087500, $1.05, down $0.15)

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, $33.63, down $0.23)

September 33 calls (AOL120922C00033000, $1.20, down $0.20)

September 32 puts (AOL120922P00032000, $0.35, up $0.05)

Thoughts:  Continue to watch.

 

Netflix (NFLX, $62.95, up $0.56)

September 70 calls (NFLX120922C00070000, $0.80, flat)

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

 

Fusion-io (FIO, $29.46, up $0.36)

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, $35.39, down $0.03)

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, $37.31, up $0.07)

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.