8:55am (EST)
Spiders S&P 500 (SPY, $132.39, up $0.44)
May 133 calls (SPY110527C00133000, $0.35, down $0.10)
Entry Price: $0.60 (5/24/11)
Exit Target: $1.00
Return: -42%
Stop Target: None
Action: We were looking for a close above 1,325 for the S&P but we still have today and tomorrow to for a run up to 1,335.
Vivus (VVUS, $8.89, up $0.50)
September 10 calls (VVUS110917C00010000, $0.65, up $0.10)
Entry Price: $0.65 (5/20/11)
Exit Target: $1.30
Return: 0%
Stop Target: None
Action: Shares are having a little trouble clearing $9 as they have traded up to $8.94 twice – yesterday and Friday. Once this level is taken out, an easy run to $10 should follow with a longer-term target of $15-$20.
MGM Resorts International (MGM, $15.53, up $0.59)
September 17 calls (MGM110917C00017000, $1.05, up $.20)
Entry Price: $0.70 (5/13/11)
Exit Target: $1.40
Return: 50%
Stop Target: 75 cents
Action: We may take half profits today into strength.
Shares got a nice 4% pop yesterday and traded up to $15.72 intraday. These options have 4 months before expiration and our target is $20 for MGM by mid-September. This would get these options to at least $3. However, we also have to realize this market is volatile so we have to take quicker profits and protect our gains.
Research In Motion (RIMM, $43.14, up $0.03)
June 40 puts (RIMM110618P00040000, $0.95, down $0.05)
Entry Price: $1.00 (5/10/11)
Exit Target: $2.00
Return: -5%
Stop Target: 75 cents
Action: RIMM’s 52-week low is $42.53 and shares traded down to $42.75 yesterday. Our near-term price target is $38 for the stock which gets these options to $2.
Seattle Genetics (SGEN, $18.94, up $0.28)
September 20 calls (SGEN110917C00020000, $2.15, up $0.25)
Entry Price: $1.50 (5/9/11)
Exit Target: $3.00
Return: 43%
Stop Target: $1.25
Action: Seattle Genetics traded above $19 on Wednesday and looked poised to take the 52-week high of $19.24. Although shares closed slightly below this level, we feel a run past $20 is coming this week or next.
Starbucks (SBUX, $36.11, down $0.17)
June 38 calls (SBUX110618C00038000, $0.25, down $0.05)
Entry Price: $0.60 (5/9/11)
Exit Target: $1.20
Return: -58%
Stop Target: None
Action: The 52-week high is $38.21 and we are expecting a run to $40 for the stock which gets these options to $2.
Dendreon (DNDN, $40.87, up $1.15)
August 50 calls (DNDN110820C00050000, $0.75, up $0.05)
Entry Price: $1.85 (4/14/11)
Exit Target: $3.70
Return: -59%
Stop Target: None
Action: Dendreon made a nice run past $40 and have looked good this week after an analyst came out with a “Buy” rating on Monday. Of course, we have been telling you to buy the stock since it was under $5 and we are hoping these options pay off with a run past $50 this summer.
Other 2011 Portfolio OPEN positions (5): These are trades that are still open in the portfolio that have longer expiration dates or 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 the options expire. Click on the 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus June 14 calls (from January 2011)
eBay July 40 calls (from February 2011)
RF MicroDevices August 10 calls (from February 2011)
KLA-Tencor June 48 calls (from May 2011)
Alpha Natural Resources June 44 puts (from May 2011)
WATCH LIST SECTION
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 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.
Kraft Foods (KFT, $34.43, down $0.44)
September 35 calls (KFT110917C00035000, $0.85, down $0.20)
Thoughts: These calls are getting attractive again. We were able to make 50% on our first Kraft trade and we are hoping we can get these calls for 70-75 cents. If they trade this low today, look for an alert but we may wait until next week to see where shares are before initiating new positions.
Illumina (ILMN, $72.23, up $1.03)
June 75 calls (ILMN110618C00075000, $0.95, up $0.20)
Thoughts: Shares opened at $69.77 and traded down to $69.42 before bouncing back. The options opened at 40 cents and traded down to 35 cents.
We wanted to make sure the $70 level held before starting positions and the open scared us away. If shares do retreat back down to $69.50 we can look at starting positions, but for now, we will sit on the sidelines.
Caterpillar (CAT, $103.25, up $1.70)
June 95 puts (CAT110618P00095000, $0.55, down $0.20)
Thoughts: CAT could fall below $100, quickly, so we liked the retracement yesterday. However, we also hate shorting or buying puts in strong companies. Shares traded to a low of $100.37 on Monday and if the $100 level fails, look for a Trade Alert if we pull the trigger.
Freeport-McMoRan (FCX, $49.98, up $1.16)
June 50 calls (FCX110618C00050000, $1.80, up $0.45)
June 45 puts (FCX110618P00045000, $0.40, down $0.30)
Thoughts: Watch this straddle trade for a break back above $50 or a breakdown below $45. The calls and puts were both near $1 when we first profiled this strangle trade and it is almost to the point where we would have a free trade if the calls can trip $2+. Continue to watch the trade but this another successful strangle trade that has gotten off to a great start.
Peet’s Coffee and Tea (PEET, $49.55, up $0.10)
June 55 calls (PEET110618C00055000, $0.65, up $0.05)
Thoughts: Peet’s hit a fresh 52-week high of $54.54 yesterday but closed only slightly higher for the session. We think a run to double-nickels is coming and we like these options at current prices. The bid/ask is also narrowing so if we can get theses options at a price of 50 cents, we might go for it.
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