1:50pm (EST)

Closed Trades for 2014: 48-28 – the Weekly Wrap is 14-3 for 2014 (99-10, or 91% win rate, since 2011) and is designed for traders that want to use options with less risk.

All trades are dated and time stamped so new subscribers can look at our past history to see how the trades have played out. 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 12pm-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.

These were my notes from last night and it is an Apple Option Watch List, or a possible new trade soon or down the road.

Monday option close (6/2/14) for Apple call options

Note:  June too soon too risky to play but EXPLOSIVE moves are possible. June 700 calls (AAPL140621C00700000, $0.60).  If one contract was bought at current levels it would cost $60.  A 7-for-1 split would then give you a June 100 call that would still expire on 6/20′s close.  The break even point is $100.60.  If shares are at $101.20 the trade would make 100%.  (technically, you would control 700 shares but the Options Clearing House takes care of these specifics).

To dummy things down, it would make no sense for you to own 7 call options with a “700 strike price” so just think of the cost involved.   More call options on Apple:

July 700 calls (AAPL140719C00700000, $2.31, down $1.09)

The spread is a little wide with the break even point at $102.31, technically, by late July.  A double above $105.

 

August 700 calls (AAPL140821C00700000, $6.25, down $1.20)

The break even point is at $106.25, technically, by mid-August. A double above $112.50.

 

October 700 calls (AAPL141018C00700000, $11.35, down $1.20) Break even just below $112.

 

January 700 call (2015) (AAPL150117C00700000, $18.95, down $2.15)

LEAP OPTION TRADE

Break even at $119.  At $90, this would be a 33% move. April 700 call (AAPL150417C00700000, $26.25, down $2.85) Break even at $126.25.  Double at $153.50.  A 67% move from $90.  One contract would cost $2,625. All of these options are still risky so its best to wait until the dust settles before rolling the dice on a straight-up trade at the present moment.  If my arm was twisted, I’d roll with the July 700 call options as a speculative trade. If you own 100 shares of Apple, it might be best to sell one of these options if you want to collect a juicy premium.  The flip-side is that if you do, you could be “called-away” and the gains are capped.   Current Trades Fortinet (FTNT, $22.24, up $0.11) July 24 calls (FTNT140719C00024000, $0.40, flat)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90

Return:  -11% Stop Target:  None

Action:  Support at $22 was tested and is holding.  The 52-week high is at $23.93.

 

CVS Caremark (CVS, $77.85, down $0.45)

July 80 calls (CVS140719C00080000, $0.65, down $0.10)

Entry Price:  $0.52 (5/28/2014)
Exit Target:  $1.10 (closed 1/3 @ $0.80 on 5/30/14)

Return:  41%

Stop Target:  70 cents (Stop Limit)

Action:  TRADE CLOSED. The Stop Limit of 70 cents on the remaining 2/3rd’s of the position has triggered.  The calls opened at 72 cents and have traded to a low of 60 cents.

 

Apollo Group (APOL, $26.29, down $0.09)

June 25 puts (APOL140621P00025000, $0.40, flat)

Entry Price:  $0.55 (4/28/2014)

Exit Target:  $1.10 (limit order to close half)

Return:  -27%

Stop Target:  None

 

August 23 puts (APOL140816P00023000, $0.70, flat)

Entry Price:  $0.70 (4/28/2014)

Exit Target:  $1.40 (limit order to close half)

Return:  0%

Stop Target:  None

Action:  Today’s low has been $26.46.  A break below $26 should lead to the low $20’s.  Strong resistance is at $28.

 

Bed, Bath & Beyond (BBBY, $60.96, down $0.01)

June 60 puts (BBBY140621P00060000, $0.60, flat)

Entry Price:  $0.60 (5/14/2014)
Exit Target:  $1.20
Return:  0%
Stop Target:  None

August 55 puts (BBBY140816P00055000, $0.60, flat) Entry Price:  $0.63 (5/14/2014) Exit Target:  $1.25 Return:  -5% Stop Target:  None Action:  Support is at $60 and a break below this level will likely lead to $57.50-$55.  An analyst downgrade would be nice this week.  Resistance is at $61.50-$62.50.

 

Twitter (TWTR, $32.63, up $0.88)

January 50 calls 2015 (TWTR150117C00050000, $1.10, up $0.10) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5

Return:  -37%