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: 159-60, or 73% win rate, including the Weekly Wrap that is 28-0).

 12:05pm (EST)

Fossil (FOSL, $90.36, up $1.05)

February 70 puts (FOSL130216P00070000, $1.30, down $0.10)

Entry Price:  $1.20 (12/26/12)
Exit Target:  $2.40
Return:  8%
Stop Target:  60 cents

Action:  We are keeping this trade open going into 2013.  The company will announce earnings in mid-February and we believe shares could tumble below $70.

 

iShares Russell 2000 Index (IWM, $83.31, up $0.78) 

January 85 calls (IWM130104C00085000, $0.30, flat)

Entry Price:  $0.70 (12/21/12)
Exit Target:  $1.40
Return:  -57%
Stop Target:  None 

Action:  We are going to close this trade today as the options expire this Friday.  There could be a nice pop in these calls on Wednesday if the zombies come up with a bigger Fiscal Cliff deal than expected but we think the chances of that happening are slim and none.

 

Cree (CREE, $33.52, up $0.32)  

January 36 calls (CREE130119C00036000, $0.45, up $0.05)

Entry Price:  $0.65 (12/21/12)
Exit Target:  $1.30
Return:  -31%
Stop Target:  None 

Action:  We are going to close the trade at current levels.  We will keep shares on our Watch List for a break above $34 to play call options again or a drop below $32 to play puts.

 

Nuance Communications (NUAN, $21.82, down $0.05)  

January 24 calls (NUAN130119C00024000, $0.15, flat)

Entry Price:  $0.35 (12/18/12)
Exit Target:  $0.70
Return:  -57%
Stop Target:  None 

Action:  We are closing the trade at current levels so use limit orders to get the best fills.

 

Southern Copper (SCCO, $37.46, up $0.19)

January 40 calls (SCCO130119C00040000, $0.15, flat) 

Entry Price:  $0.45 (12/14/12)
Exit Target:  $1.00
Return:  -67%
Stop Target:  None

Action:  We are closing the trade at current levels but we still believe shares could make a run past $40.

  

Taser International (TASR, $8.87, up $0.24)   

January 10 calls (TASR130119C00010000, $0.15, flat)

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  0%
Stop Target:  None

 

March 10 calls (TASR130316C00010000, $0.50, flat) 

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  67%
Stop Target:  None

Action:  We like both of these options going into the New Year so we are leaving the trade open as we look for a close above $9 this week.

 

Vivus (VVUS, $13.26, up $0.05)

January 15 calls (VVUS130119C00015000, $0.45, flat)

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  -31%
Stop Target:  None

Action:  When we opened this trade in November, shares were at around $11 and the low for the day had been $10.34 for the session.  We still believe Vivus will be a takeover target in 2013 and we should have used longer-term options to let our thesis play out.  We are watching the June 20 calls (VVUS130622C00020000, $1.00, flat) for a possible play and we may get into them on Wednesday as we don’t want o be out of Vivus for too long as a buyout offer could come at any time over the next few months.

 

Other 2012 Portfolio OPEN positions (3):  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) – we recommended the calls when shares of BAC were under $10.  Although the stock has made a nice gain, we are closing the calls at current levels.  The bid/ask is 12/13 cents.

Monster Beverage January 35 puts (from November 2012) – close the trade at current levels but we may only get a nickel with the ask at 10 cents.

Rosetta Stone January 15 calls (from November 2012) – close the trade at current levels with the bid/ask at 6/10 cents.

 

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 be back on Wednesday with some fresh ideas.  We should get a good read on the market following this week’s close on if there will be a new trend or a continued trading range.