September 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.

1:05pm (EST)

Monster Beverage (MNST, $55.87, down $1.38)

September 52.50 puts (MNST120922P00052500, $0.75, up $0.35)

Entry Price:  $0.80 (9/5/12)
Exit Target:  $1.60
Return:  -6%
Stop Target:  None

October 50 puts (MNST121020P00050000, $1.10, up $0.35)

Entry Price:  $1.10 (9/5/12)
Exit Target:  $2.20
Return:  0%
Stop Target:  55 cents

Action:  We were just going to go with the October puts but we wanted to get aggressive with the September puts as we plan to be out of them by Friday.  Shares have rebounded a little since we got into the trades but we are looking for a close below $55. 

 

Solazyme (SZYM, $11.73, up $0.12)

December 12.50 calls (SZYM121222C00012500, $0.90, up $0.10)

Entry Price:  $0.70 (9/5/12)
Exit Target:  $1.40
Return:  29%
Stop Target:  None

Action:  There is risk down to $11 but we are expecting a quick trip back above $12.50 and then a possible move towards $14.  If reached, these options will easily double.

 

Silver Wheaton (SLW, $35.23, up $0.09)

October 37 calls (SLW121020C00037000, $1.20, up $0.05)

Entry Price:  $1.10 (9/4/12)
Exit Target:  $3.00
Return:  9%
Stop Target:  55 cents

Action:  We would like to see a close above $36 this week.  We have a $40 price target by mid-October for the stock which would get the calls to $3.  Short-term support is at $34 and where we might hit the door.   

 

Apollo Group (APOL, $27.90, up $0.37)

October 24 puts (APOL121020P00024000, $0.70, down $0.10)

Entry Price:  $1.16 (8/28/12)
Exit Target:  $2.30
Return:  -40%
Stop Target:  60 cents

September 24 puts (APOL120922P00024000, $0.15, down $0.05)

Entry Price:  $1.10 (7/31/12)
Exit Target:  $2.20
Return:  -82%
Stop Target:  None

Action:  We said there is risk up to $28 so let’s see if it holds into the close.  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.

 

Cymer (CYMI, $56.88, up $0.10)

September 55 puts (CYMI120922P00055000, $1.10, down $0.10

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

Action:  Cymer traded to a low of $55.27 but finished in positive territory by the close.  There is risk up to $58 but we are expecting a close below $55 by week’s end.  A close above $60 will likely force us out of the trade.

 

Knight Capital Group (KCG, $2.77, up $0.01)

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.

 

Pepsico (PEP, $71.63, down $0.31)

October 75 calls (PEP121020C00075000, $0.35, down $0.05)

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

Action:  Continue to hold for now.

      

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.

We will update this section in the morning.

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11:25am (EST)

Monster Beverage (MNST, $54.94, down $2.31)

Buy to OPEN September 52.50 puts (MNST120922P00052500, $0.80, up $0.40)

Buy to OPEN October 50 puts (MNST121020P00050000, $1.10, up $0.35)

Action:  Use limit orders up to 90 cents for the September puts and limit orders up to $1.25-$1.30 for the October puts.

 

Solazyme (SZYM, $11.64, up $0.03)

Buy to OPEN December 12.50 calls (SZYM121222C00012500, $0.70, down $0.10)

Action:  Use limit orders up to 75-80 cents but do not pay over 90 cents to establish positions.

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9:00am (EST)

Silver Wheaton (SLW, $35.14, up $0.54)

October 37 calls (SLW121020C00037000, $1.15, up $0.15)

Entry Price:  $1.10 (9/4/12)
Exit Target:  $3.00
Return:  5%
Stop Target:  55 cents

Action:  Shares traded to a high of $35.40 as the options reached $1.25 yesterday.  We would like to see a close above $36 this week.  We have a $40 price target by mid-October for the stock which would get the calls to $3.  Short-term support is at $34 and where we might hit the door.   

 

Apollo Group (APOL, $27.53, up $0.68)

October 24 puts (APOL121020P00024000, $0.80, down $0.15)

Entry Price:  $1.16 (8/28/12)
Exit Target:  $2.30
Return:  -31%
Stop Target:  60 cents

September 24 puts (APOL120922P00024000, $0.20, down $0.05)

Entry Price:  $1.10 (7/31/12)
Exit Target:  $2.20
Return:  -82%
Stop Target:  None

Action:  Frustrating.  Resistance is at $28 which we expect to hold.  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.

 

Cymer (CYMI, $56.78, up $0.08)

September 55 puts (CYMI120922P00055000, $1.20, down $0.10)

Entry Price:  $1.42 (8/23/12)
Exit Target:  $2.25+
Return:  -15%
Stop Target:  70 cents

Action:  Cymer traded to a low of $55.27 but finished in positive territory by the close.  There is risk up to $58 but we are expecting a close below $55 by week’s end.  A close above $60 will likely force us out of the trade.

 

Knight Capital Group (KCG, $2.76, flat)

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.

 

Pepsico (PEP, $72.48, up $0.05)

October 75 calls (PEP121020C00075000, $0.40, flat)

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

Action:  One of Pepsico’s top brass will be on the tube today promoting their NFL deal which could give shares a pop.  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 will need a break above $73 to get the momentum back.  If shares trade below $72-$71, we may exit the trade as there would be further risk to $70 and not enough time to play a rebound.

       

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.

magicJack VocalTech (CALL, $25.09, up $0.42)

September 25 calls (CALL120922C00025000, $0.90, up $0.15)

October 27 calls (CALL121020C00027000, $x)

Thoughts:  Shares could be setting up to make a run at their 52-week high of $28.22.

Monster Beverage (MNST, $57.25, down $1.69)

September 55 puts (MNST120922P00055000, $0.90, up $0.30)

October 50 puts (MNST121020P00050000, $0.80, up $0.10)

Thoughts:  Shares could test $50 with an outside shot at $45 on continued weakness.

Solazyme (SZYM, $11.61, down $0.38)

December 12.50 calls (SZYM121222C00012500, $0.80, down $0.15)

Thoughts:  Shares fell to a low of $11.19 yesterday and support has been strong at $11.  If support holds and there is a rebound back near $14 by Christmas, these options will double.

 

Apple (AAPL, $674.97, up $9.73)

September 680 calls (WEEKLY) (AAPL120907C00680000, $3.35, up $1.50)

Thoughts:  These options opened at $1.69 and traded to a high of $3.85 yesterday.  We checked on them as we were doing the midday update and they were going for $1.75 shortly after noon.  With the Nasdaq below 3,050 and silver up, we felt more comfortable playing Silver Wheaton.  Still, we should have casted a line with some small bait because we said “shares of Apple usually make a nice move in the week before an expected new product announcement”.  In case you haven’t heard, the iPhone5 will be out next week as Apple made it official with a snazzy email to its customers.

 

Amgen (AMGN, $84.33, up $0.41)      

September 85 calls (AMGN120922C00085000, $1.00, up $0.10)

October 87.50 calls (AMGN121020C00087500, $1.10, up $0.05)

Thoughts:  A close above $85 could lead to a blue-sky territory and a $100 stock.  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 this week.  If support at $80 is broken down the road, we will play put options.

 

Caterpillar (CAT, $82.66, down $2.67)

September 82.50 puts (CAT120922P00082500, $1.95, up $0.90)

October 80 puts (CAT121020P00080000, $2.50, up $0.80)

Thoughts:  We have been warning shares of CAT could test $80 but we closed the other half of the September puts on Friday.  We wanted to follow-up the trade with the October 80’s but we thought we would have more time as we were looking for shares to retest $87.50.  The September 80 puts closed at $1.05, up 55 cents, and could also be used to play further weakness.

 

AOL (AOL, $33.48, down $0.19)

September 33 calls (AOL120922C00033000, $1.00, down $0.20)

September 33 puts (AOL120922P00033000, $0.60, flat)

Thoughts:  A close above $34.50 could lead to another surge but resistance has been a brick wall at $34.  We are waiting for a close below $32 to play possible put options on a move back uner $30 once this level is taken out.

 

Netflix (NFLX, $55.93, down $3.79)

September 65 calls (NFLX120922C00065000, $0.40, down $0.55)

September 55 puts (NFLS120922P00055000, $2.30, up $1.30)

September 50 puts (NFLS120922P00050000, $0.80, up $0.50)

Thoughts:  Shares traded to a low of $53.13 yesterday as the September 65 calls reached a peak of $3.80.  We should have been all over this trade on Friday on the drop below $60 but the 3-day weekend kept us at bay.  We have listed the September 50 puts as a way to play further weakness.

 

Fusion-io (FIO, $28.80, up $0.78)

September 30 calls (FIO120922C00030000, $0.70, up $0.20)

October 30 calls (FIO121020C00030000, $1.50, up $0.25)

September 26 puts (FIO120922P00026000, $0.30, down $0.20)

Thoughts:  There is risk down to $26 and resistance is at $30.  A move above $30 would be super bullish.

 

Broadcom (BRCM, $35.34, down $0.19)

September 36 calls (BRCM120922C00036000, $0.60, down $0.15)

September 33 puts (BRCM120922P00032000, $0.30, up $0.05)

Thoughts:  The 52-week high is $39.66 and a close above $36 would be bullish.  On a break below $34 we might look to go short as shares will likely test and fall below their 50, 100 and 200-day MA.

 

Akamai Technologies (AKAM, $37.67, up $0.16)

September 38 calls (AKAM120922C00038000, $0.85, up $0.05)

November 45 calls (AKAM121117C00045000, $0.70, flat)

January 45 calls (AKAM130119C00045000, $1.30, up $0.05)

Action:  A close below $36 would be bearish while a break above $38 could send shares into blue-sky territory and north of $40.