12:25pm (EST)

The 1Q earnings season has been over but I have mentioned there are companies reporting into mid-to-late June worth watching.  The will be a serious continued slowdown leading into the July 4 holiday but the explosion of 2Q earnings will start to hit Wall Street the second full week next month.  For now, there are opportunities but it might be best to use strangle option trades when playing earnings.

BlackBerry (BBRY, $7.84, down $0.02) will announce their numbers ahead of Thursday’s open and with anticipation low, the company could surprise to the upside.

The July 8 calls (BBRY140719C00008000, $0.44, down $0.02) are trading for 50 cents and could be a good lottery trade for a run to $9.  Of course, BlackBerry would have to wow Wall Street and post some impressive growth but those heydays are likely over.

In case of a disappointment, the June 8 puts (BBRY140621P00008000, $0.49, up $0.01) or the July 7 puts (140719P00007000, $0.18, flat) could be used as “protection” to play a possible drop below $7.

There are over 30 analysts following the stock and the estimates range for a loss of 2 cents to an incredible 52 cents a share loss for the quarter.  If by a miracle the company announces a profit, shares could soar as short-sellers run for cover.  Not likely, but possible.

I’d rather sit on the sidelines and wait until BlackBerry returns to profitability before trying to catch a falling knife.  I do like trading the stock and at some point there might be an opportunity to invest but this quarter could be a good tell if the company will even be around next year.

Heading into the second half of trading, the Dow is down 87 points to 16,858 while the S&P 500 is declining 5 points to 1,945.  The Nasdaq is lower by 2 points to 4,337 and the Russell 2000 is slipping 5 points to 1,167.

There are some current trades swelling up as there are 2 trades up 78% and 80%, respectively.  I also have 2 new additions I’m adding to the portfolio.

Closed Trades for 2014: 50-29 – the Weekly Wrap is 15-3 (83%) for 2014 (100-10, 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.

Hercules Offshore (HERO, $4.66, down $0.02)

Buy to OPEN October 5 calls (HERO141018C00005000, $0.35, down $0.05)

Action:  Shares have cleared the 100-day MA at $4.64 this week and a run to $5-$6 could be in the works over the summer.  I want to give the trade plenty of time to play out so buy these options at current levels to play the ride.

Kodiak Oil & Gas (KOG, $13.25, up $0.07)

Buy to OPEN July 14 calls (KOG140721C00014000, $0.35, up $0.05)

Action:  Shares could be setting up for a run to $15.

Current Trades

Imax (IMAX, $26.60, up $0.07)

September 28 calls (IMAX140920C00028000, $0.90, flat)

Entry Price:  $0.60 (6/5/2014)
Exit Target:  $1.20
Return:  50%
Stop Target:  None

Action:  The close above the 50-day MA was bullish and should get $28-$30 in play.  Support is at $25.50.

Limelight Networks (LLNW, $3.00, down $0.02)

September 3 calls (LLNW140920C00003000, $0.35, flat)

Entry Price:  $0.15 (6/4/2014)
Exit Target:  $0.45
Return:  133%
Stop Target:  None

December 3 calls (LLNW141220C00003000, $0.50, flat)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  150%
Stop Target:  None

Action:  Roth Capital lifted its Price Target for Limelight Networks to $4.50 from $3 following its recent win against AKAM.  I have already covered the acquisition appeal of the stock and Captain Obvious echoed those comments with the late day Tuesday comments on the stock.  In any event, it is good to see the suit-and-ties start to jump on board as analyst upgrades are good for a company’s stock.

If shares make a run to $3.50, the return should be 200% for each trade.  A close above $4 would make both calls worth $1 and an even bigger payday.  Support is at $2.75.

Fortinet (FTNT, $23.75, up $0.46)

July 25 calls (FTNT140719C00025000, $0.45, up $0.05)

Entry Price:  $0.25 (6/4/2014)
Exit Target:  $0.50
Return:  78%
Stop Target:  None

July 24 calls (FTNT140719C00024000, $0.80, up $0.15)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  80%
Stop Target:  None

Action:  Close HALF of the trades at current levels.

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

Twitter (TWTR, $35.73, up $0.36)

January 50 calls 2015 (TWTR150117C00050000, $1.50, flat) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50
Return:  -14%
Stop Target:  None

Action:  Twitter shares reached a peak of $35.50 and held resistance at $35.  The next hurdle is at $37-$38.  Fresh support is at $35 with $32.50 serving backup.

Other 2014 Portfolio OPEN positions (4):  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) – continue to hold
McDonald’s July 95 puts (from May 2014) – continue to hold
Bed, Bath & Beyond – continue to hold as shares could still make a break below $60 by next week.
June 60 puts (from May 2014)
August 55 puts (from May 2014)
Apollo Group – continue to hold
June 25 puts (from April 2014)
August 23 puts (from April 2014)