MEMBERS AREA
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 tradesor “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 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. Closed Trades for 2014: 13-1- the Weekly Wrap is 6-1 for 2014 (91-8 since 2011) and is designed for traders that want to use options with less risk.
1:40pm (EST)
New Trade!!!
Krispy Kreme Doughnuts (KKD, $17.67, down $0.46)
Buy to OPEN March 16 puts (KKD140322P00016000, $0.70, up $0.12)
Action: We have said we expect a near-term test to $15 for KKD and the break below $18 was what we were looking for.
Current Trades
BlackBerry (BBRY, $9.62, down $0.27)
February 11 calls (BBRY140222C00011000, $0.25, down $0.10)
Entry Price: $0.65 (1/22/2014)
Exit Target: $1.30
Return: -62%
Stop Target: None
Action: There could be a back test to $9-$8.50 if volatility picks up but we still like the position. A close back above $10.50 would be bullish but we will exit the trade on a drop below $9.
Exact Sciences (EXAS, $13.53, down $0.74)
April 19 calls (EXAS140419C00019000, $0.60, down $0.20)
Entry Price: $0.88 (1/22/2014)
Exit Target: $1.75
Return: -32%
Stop Target: None
Action: There is a chance for a breakout past $15 or a drop below $13.50 when earnings come out this week but it is not a hard date. The company should also get some FDA news in March on its Cologuard drug. These are April options with 3 months until expiration and we plan to hold through the volatility because we want to be in when the March news is released and why we do not have a Stop Limit listed. There could be further weakness and we may have to put the trade on hold but this will be a major event.
PowerShares QQQ (QQQ, $85.80, down $0.94)
February 90 calls (QQQ140222C00090000, $0.20, down $0.10)
Entry Price: $0.75 (1/22/2014)
Exit Target: $1.50
Return: -73%
Stop Target: None
Action: There is risk to $86 and we may give the trade wiggle room to $85. We should know by Friday if this trade comes back or if we need to cut the cord. Apple’s earnings could also speed up the process on if we need to hold or fold the trade.
Ariad Pharmaceuticals (ARIA, $8.20, down $0.79)
February 8 calls (ARIA140222C00008000, $1.20, down $0.60)
Entry Price: $0.45 (1/17/2014)
Exit Target: $0.90-$1.35, raise to $3 (closed a QUARTER @ $1.50 on 1/24/14)
Return: 183%
Stop Target: $1.20 (Stop Limit)
Action: Our Stop Limit of $1.20 has been triggered so everyone should be out of the trade. We will keep the stock on our Watch List and will likely start new positions on a move back above $9-$10.
Sony (SNE, $16.05, down $0.65)
February 19 calls (SNE140222C00019000, $0.05, down $0.05)
Entry Price: $0.45 (1/8/2014)
Exit Target: $0.90
Return: -78%
Stop Target: None
April 20 calls (SNE140419C00020000, $0.15, down $0.10)
Entry Price: $0.55 (1/8/2014)
Exit Target: $1.10
Return: -73%
Stop Target: None
Action: We could be in trouble with Sony as today’s test to $16 is very bearish. We mentioned Sony was either headed back above $20 or the low teens and we may have picked the wrong side of the trade. Let’s see where the stock is at by the end of the week before possibly cutting our losses but in the meantime we will place the trade on hold.
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 2013Portfolio link in the Members Area to view ALL open/ closed trades.
SLM February 27 calls (from January 2014)
General Electric March 28 calls (from January 2014)
PulteGroup February 22 calls (from January 2014)
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.
We will update this section in the morning.