1:10pm (EST)

Wall Street is on standby as the world awaits what ECB President Mario Draghi has to say.

The market is expecting the European Central Bank to announce some sort of quantitative easy or stimulus program for Europe.  Expectations are for something big but the Draghi has a long history of disappointing Wall Street.

The bulls are expecting something good as well as they are trying to push the market higher.  The bears are hoping for a sell the news event.

The Dow is up 3 points to 16,725 while the S&P 500 is higher by 2 ticks to 1,926.  The Nasdaq is gaining 16 points to 4,250 and the Russell 2000 is gaining 3 points to 1,129.  Both good signs.

I have 2 New Trades for today.

Closed Trades for 2014: 49-28 – 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.


Limelight Networks (LLNW, $2.50, up $0.13)

Buy to OPEN September 3 calls (LLNW140920C00003000, $0.15, up $0.05)

Buy to OPEN December 3 calls (LLNW141220C00003000, $0.20, up $0.10)

Action:  The company won a court case against Big Boy AKAM.  I love these call options at current levels.

Fortinet (FTNT, $22.57, up $0.37)

Buy to OPEN July 25 calls (FTNT140719C00025000, $0.25, up $0.05)

Action:  I am going to piggy-back the current trade on FTNT by adding these call options.

Current Trades

Fortinet (FTNT, $22.57, up $0.37)

July 24 calls (FTNT140719C00024000, $0.50, up $0.10)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  11%
Stop Target:  None

Action:  The 52-week high is at $23.93.  Support is at $22.

Apollo Group (APOL, $27.24, up $0.60)

June 25 puts (APOL140621P00025000, $0.25, down $0.05)

Entry Price:  $0.55 (4/28/2014)
Exit Target:  $1.10 (limit order to close half)
Return:  -52%
Stop Target:  None

August 23 puts (APOL140816P00023000, $0.65, down $0.05)

Entry Price:  $0.70 (4/28/2014)
Exit Target:  $1.40 (limit order to close half)
Return:  -5%
Stop Target:  None

Action:  Aargh.  A break below $26 should lead to the low $20’s.  Strong resistance is at $28.  The June puts continue to get drained as the time premium starts to erode so shares need to close below $26 this week to keep the bulls of the stock uneasy.

The company will report earnings in a couple of week.  The June options expire in 2 weeks from Friday.  The first half of the trade could come down to the wire.  I have shown how these options were down over 90% and turned positive a few weeks ago.  I probably should have closed half of the trade as this dragon won’t die but hopefully it does by June expirarion.

Bed, Bath & Beyond (BBBY, $61.12, up $0.14)

June 60 puts (BBBY140621P00060000, $0.50, flat)

Entry Price:  $0.60 (5/14/2014)
Exit Target:  $1.20
Return:  -17%
Stop Target:  None

August 55 puts (BBBY140816P00055000, $0.55, flat)

Entry Price:  $0.63 (5/14/2014)
Exit Target:  $1.25
Return:  -13%
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.  BBBY also reports the same week APOL does.  I am expecting both companies to miss Wall Street’s expectations and they could/ should pre-announce if this is the case.

Twitter (TWTR, $33.01, up $0.43)

January 50 calls 2015 (TWTR150117C00050000, $1.30,  up $0.10) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5
Return:  -26%
Stop Target:  None

Action:  Support has moved up to $32.50.  Resistance is at $35.

Other 2014 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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.

iShares Russell 2000 June 103 puts (from May 2014)
Kirkland’s June 15 puts (from May 2014)
McDonald’s July 95 puts (from May 2014)