1:35pm (EST)
We said there was a good possibility Twitter would announce their Initial Public Offering (IPO) this week and after the bell on Thursday they made us look like we knew what we were talking about. The company hopes to raise $1 billion with the offering and could be trading by Turkey Day as we predicted. The ticker symbol will be “TWTR” but there was no word if Twitter will list on the Nasdaq or New York Stock Exchange. The suit-and-ties from the Nasdaq are at Twitter’s headquarters today as they were “in the neighborhood”.
In other IPO news, Potbelly (PBPB, $32.46, up $18.46) is surging 132% on its first day of trading after offering 7.5 million shares at $14. Shares opened at $28.66 and have traded to a high of $33.78. Meanwhile, a recent IPO that continues to shoot to the moon is Rocket Fuel (FUEL, $66.25, up $5.75) as shares have kissed $68 today. We are waiting on the options to trade on this stock and hopefully they come out before shares hit $100. We normally shy away from playing options on stocks over $100 due to the high premiums as near-term options can cost $3-$4 apiece. We like to keep our options trades under $2-$1.
We have started our next batch of option trades as we have 2 November plays and plenty more to choose from on our Watch List. There are a dozen possible option trades on our Big Board and when there is a clear trend we can carry up to 15 trades. In choppy markets we only like to carry 5-10 open trades, sometimes less.
We said yesterday we have a few trades winding down from July, August, and September and since the start of July we are 21-7 for our Daily portfolio with gains of +175%, +140%, +201%, +364% for our top winners. We have 2 more current open trades that are up 250%-319% (1 for the Weekly) and a few dead soldiers that may not make it by October 18 and when October options expire.
We are scoring on 70% of our trades for the year and the closed trade portfolio is up over 200% as we have shown you how to turn $10,000 into $30,000 so far this year. We doubt there has been a more accurate option trading service than us and we plan to stay hot through yearend (and forever for that matter). We are on track for our sixth-straight profitable year and over that time frame we are also pushing nearly a 70% win rate.
We don’t hang out with the suit-and-ties and our research team works 6 days a week to bring you the best trades. We continue to say this is one of the best times we have seen in a few years to trade options and with earnings season starting next week, we could get really busy.
The bulls still look like they could push new highs despite the Dow breaking down this week but the other 3 major indexes are hanging in there. Of course, the market can turn on a dime at a moment’s notice given all of the headline risk but the clues we have given you all week have been extremely accurate. Doing your homework week-in and week-out helps keep emotions in check.
We mentioned a positive Friday close for the bulls would be a good start for next week but Monday’s have also been rough. A reversal of this trend could signal a bottom is in but there will be other factors that will play a role in determining the next trend.
The market is now in a 3-week trading range that is getting stretched to the upside and downside as expected with volatility picking up. We said this is going to be a fun ride and we can’t wait to do our research this weekend.
As we head to press, the Dow is up 61 points to 15,057 while the S&P 500 is higher by 9 points to 1,688. The Nasdaq is advancing 30 points to 3,804.
We will be back on Sunday night with the Weekly Wrap and on Monday morning with the Daily. If you haven’t jumped on board with our Weekly Wrap, we just want to remind you we started trading LEAP options over a month ago and our first two trades have been huge winners. These trades take a little longer to play out than our Daily trades but are just as powerful. We mentioned we have one trade approaching a 300% return and we have only been in the position for a little over a month. Another LEAP call option has doubled.
Special Notice: Also as we head to press, JC Penney (JCP, $7.95, down $0.47) continues to break down like a rented mule and we are ringing the resister on another quarter of the trade as our put option have reached $4+. Our return is now up to 319% and we have said shares could test $6, meaning another possible dollar or two on our remaining quarter position. What a nice way to end the week. Until then have a great weekend everyone!
