9:00am (EST)
Wellpoint(WLP, $55.85, down $0.31)
December 52.50 puts (WLP121222P00052500, $0.80, flat)
Entry Price: $0.75 (11/12/12)
Exit Target: $1.50
Return: 7%
Stop Target: None
Action: We have a near-term target of $54. If shares fall below this level there is a chance $50 comes into play.
KLA-Tencor (KLAC, $47.60, up $1.36)
December 43 puts (KLAC121222P00043000, $0.55, down $0.25)
Entry Price: $0.60 (11/7/12)
Exit Target: $1.20
Return: -8%
Stop Target: None
Action: We said there was risk up to $48 and yesterday’s low was $48 even. We are expecting a near-term test to $44 but if this level fails shares could push $40.
LifeLock (LOCK, $8.13, up $0.05)
December 10 calls (LOCK121222C00010000, $0.30, flat)
Entry Price: $0.10 (11/6/12)
Exit Target: $0.50
Return: 200%
Stop Target: None
Action: A close above $8.20 this week would be bullish. A drop below $7.60 would be bearish.
Apollo Group (APOL, $19.25, up $0.50)
December 18 puts (APOL121222P00018000, $0.80, down $0.20)
Entry Price: $0.88 (10/25/12)
Exit Target: $1.70
Return: -9%
Stop Target: None
Action: We would like to see shares close below $18.50 this week. If there is a rebound we would like to see $20 hold. We have said all year long shares could test the mid to low teens.
Other 2012 Portfolio OPEN positions (7): 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 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
***November Options Expire This Friday***
O’Reilly Automotive November 70 puts (from October 2012)
American Express November 60 calls (from October 2012)
Buffalo Wild Wings November 70 puts (from September 2012)
LeapFrog November 10 calls (from November 2012)
Bank of America January 12.50 calls (2013) (from March 2012) – continue to hold
Knight Capital Group January 2.50 calls (2013) (from August 2012) – takeover target
Solazyme December 12.50 calls (from September 2012) – continue to hold
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 any 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 but these are the trades we are watching as new candidates.
Lufkin Industries (LUFK, $49.55, up $0.31
December 45 puts (LUFK121222P00045000, $1.00, down $0.15)
Thoughts: The 52-week low is $45.11 and shares seem to be making a back test to $50. If cleared there is further risk to $52. We like these puts if resistance holds and we would like to pick them up for 80 cents or less of there is a push to $50 today. We will send out a Trade Alert if we take action but let’s see how shares open.
PowerSharesQQQ (QQQ, $63.42, down $0.01)
December 65 calls (QQQ121222C00065000, $0.75, down $0.10)
December 61 puts (QQQ121222P00061000, $0.75, down $0.10)
Thoughts: There could be a test to $60 but we plan on buying calls on a move above $65. There may be enough volatility to start positions now as a strangle option trade but that will limit the gains. It would also limit losses.
S&P 500 Spiders (SPY, $138.26, up $0.10)
December 144 calls (SPY121222C00144000, $0.65, down $0.10)
December 130 puts (SPY121222P00130000, $0.85, down $0.30)
Thoughts: There could be a test to $135 but we plan on buying calls on a move above $140.
HealthCare REIT (HCN, $58.94, up $0.30)
December 60 calls (HCN121222C00060000, $0.75, up $0.10)
Thoughts: Wait for a close above $59.50 to go long or we may go short on a close below $57.50.
SolarWinds (SWI, $51.89, up $0.07)
December 45 puts (SWI121222P00045000, $0.55, down $0.05)
Action: We have been hoping shares would do a back test to $55 but $52 is sticking. If $50 fails, shares could test the mid to low $40’s.