July 2013 | 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 tradesor “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 2013: 87-45, including the Weekly Wrap that is 27-3).

1:15pm (EST)

New Trade!!!

Walter Energy (WLT, $11.07, down $0.46)

Buy to OPEN August 9 puts (WLT130817P00009000, $0.30, up $0.07)

Buy to OPEN September 9 puts (WLT130921P00009000, $0.70, up $0.08)

Action:  We like these puts at current levels.  The 52-week low of $9.88 was hit in late June and a test to $10 is likely over the next few weeks.  If these levels crack, there is a chance $7 comes into the mix.


Current Trades

Royal Bank of Scotland (RBS, $10.38, down $0.07)

August 10 calls (RBS130817C00010000, $0.60, down $0.05)

Entry Price:  $0.55 (7/23/13)
Exit Target:  $1.10
Return:  9%
Stop Target:  None


November 12.50 calls (RBS131116C00012500, $0.25, flat)

Entry Price:  $0.20 (7/23/13)
Exit Target:  $0.60
Return:  25%
Stop Target:  None

Action:  The 52-week high is at $11.84 and we believe shares can trade up to $13 over the next few months.  The Financial stocks have been strong and we will stick with the trade as long as $10 holds.


Finisar (FNSR, $18.94, up $0.28)

August 19 calls (FNSR130817C00019000, $0.70, up $0.10)

Entry Price:  $0.50 (7/18/13)
Exit Target:  $1.00
Return:  40%
Stop Target:  25 cents

Action:  Shares should challenge $20 over the near-term, possibly $25 by yearend.  Yesterday’s peak was $18.97.  Support is at $17.  The company has some sweet, new products that could add some extra pennies to their earnings for the current quarter.


MGM Resorts International (MGM, $15.85, down $0.22)

August 16 calls (MGM130817C00016000, $0.65, flat)

Entry Price:  $0.50 (7/17/13)
Exit Target:  $1.00 (closed half @ $0.65 on 7/24/13)
Return:  20%
Stop Target:  55 cents (Hard Stop)


September 17 calls (MGM130921C00017000, $0.41, down $0.09)

Entry Price:  $0.42 (7/17/13)
Exit Target:  $1.00 (closed half @ $0.50 on 7/24/13)
Return:  10%
Stop Target:  42 cents (Hard Stop)

Action:  Our Hard Stops have triggered on the other halves of the trade so we are out.  We will keep the stock on our Watch List because we do believe MGM will push $20 this year.


Sony (SNE, $22.01, down $0.80)

August 24 calls (SNE130817C00024000, $0.25, down $0.25)

Entry Price:  $0.50 (7/11/13)
Exit Target:  $1.00
Return:  -50%
Stop Target:  None


August 26 calls (SNE130817C00026000, $0.10, down $0.05)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  -50%
Stop Target:  None


October 25 calls (SNE131019C00025000, $0.65, down $0.35)

Entry Price:  $0.80 (7/11/13)
Exit Target:  $1.60
Return:  -19%
Stop Target:  None

Action:  Support is at $22 and then the 50-day MA so we don’t want to bail just yet.  Let’s see if $22 holds into the close.  Continue to hold.


Other 2013 Portfolio OPEN positions (1):  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 2013Portfolio link in the Members Area to view ALL open/ closed trades.

Apollo Group August 16 puts (from June 2013) – HOLD – We still like this trade and will bring back coverage once shares fall below $18.  We will close the trade if the stock clears $20, and if we do, we will send out a Trade Alert.



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.