December 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 “New Trade” 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.  Closed Trades for 2012: 148-54, or 73% win rate, including the Weekly Wrap which is 26-0).

12:10pm (EST)

MGM Resorts International (MGM, $11.44, up $0.11)

January 11 calls (MGM130119C00011000, $0.75, up $0.10)

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  47%
Stop Target:  55 cents

Action:  We would like to see a close above $11.50 today.  We are looking for shares to make a near-term run to $12 which would get these calls to at least $1.

 

American Express (AXP, $57.65, down $0.02)

January 57.50 calls (AXP130119C00057500, $1.40, flat)

Entry Price:  $1.00 (12/10/12)
Exit Target:  $2.00
Return:  40%
Stop Target:  $1.10 (Hard Stop)

Action:  We have a near-term target of $60.  This will get these options to $2.50 if reached.  Support is at double-nickels ($55).

 

TiVo (TIVO, $12.47, down $0.01)  

January 12.50 calls (TIVO130119C00012500, $0.80, flat)

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  33%
Stop Target:  60 cents 

 

May 14 calls (TIVO130518C00014000, $0.90, flat)

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  32%
Stop Target:  70 cents

Action:  TiVo has traded to a high of $12.66 today.  A close above $12.75 would be bullish for a possible run to $16.  Support has been super strong at $10.  We recommended the January calls to play the near-term possible breakout and we went with the May calls for the possibility of a buyout. 

  

Dunkin’ Brands Group (DNKN, $32.19, down $0.04)

January 32.50 calls (DNKN130119C00032500, $0.85, flat) 

Entry Price:  $0.45 (12/4/12)
Exit Target:  $1.00 (closed half at $0.90 on 12/12/12)
Return:  94%
Stop Target:  70 cents (Hard Stop) 

Action:  We have set a Hard Stop of 70 cents on the other half of the position and the low today has been 75 cents.  If shares slip further, this trade will likely close as the Hard Stop will trigger.  There is still a chance $34 triggers if this level is cleared but if shares start to fade we will ring the register on the other half of the trade.

 

Taser International (TASR, $7.80, down $0.014)

January 10 calls (TASR130119C00010000, $0.10, flat)

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  -33%
Stop Target:  None

 

March 10 calls (TASR130316C00010000, $0.25, down $0.05)

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  -17%
Stop Target:  None 

Action:  A close over $8.50 could be bullish for a run to $10.  Support is at $8 followed by $7.50.

  

Vivus (VVUS, $11.53, down $0.22) 

January 15 calls (VVUS130119C00015000, $0.35, down $0.05)

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  -46%
Stop Target:  None

Action:  We are looking for a close back above $12 over the near-term and shares reached $12.09 on Wednesday.  Support has been strong at $10.

 

Rosetta Stone (RST, $12.29, down $0.10)

January 15 calls (RST130119C00015000, $0.15, flat) 

Entry Price:  $0.20 (11/19/12)
Exit Target:  $1.00
Return:  -25%
Stop Target:  None 

Action:  We will stick with the trade as long as $11.50 holds.  We would like to see a close back above $12.50 this week.

 

HealthCare REIT (HCN, $58.93, down $0.60)

December 60 calls (HCN121222C00060000, $0.20, down $0.20)

Entry Price:  $1.00 (11/19/12)
Exit Target:  $2.00
Return:  -80%
Stop Target:  None

Action:  We are closing this trade to save the remaining premium as these options expire next Friday.  We were going to hold them open if shares closed above $60 on Friday but given today’s pullback, it’s unlikely.

 

Knight Capital Group (KCG, $3.25, up $0.04) 

January 2.50 calls (KCG130119C00002500, $0.75, flat)

Entry Price:  $0.55 (8/21/12)
Exit Target:  $1.10
Return:  45%
Stop Target:  65 cents  

Action:  The current buyout offer is $3.50 but we expect a final price north of $4 by mid-January.  This would make these options worth at least $1.50 minimum for a juicy triple-digit return.  Shares will remain in a tight range until another offer surfaces.

 

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.

Bank of America January 12.50 calls (2013) (from March 2012) – continue to hold

Solazyme December 12.50 calls (from September 2012)– continue to hold

Lufkin Industries December 45 puts (from November 2012) – half position open

LifeLock December 10 calls (from November 2012)– continue to hold

Monster Beverage January 35 puts (from November 2012)– continue to hold

Apollo Group December 18 puts (from October 2012) – continue to hold

 

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.