12:35pm (EST)
Walt Disney (DIS, $30.38, up $0.35)
February 30 calls (DIS100220C000300000, $0.67, up $0.16)
Entry Price: $0.60 (2/9/10)
Exit Target: $0.80+
Return: 12%
Stop Target: 30 cents
Action: We didn’t get near our 80 cents exit so we may have to close the options here at these levels. We don’t want to push the envelope and the market will be closed on Monday.
You have the option of keeping this trade open to wait for better exit prices but you also risk giving back gains on a trade that is broken. If you decide to hold them we would at least exit the trade on Friday but we are dropping coverage and getting out with a win.
Berkshire Hathaway Class B (BRK/B, $74.73, up $0.31)
June 100 calls (BPYFT, $0.40, flat) (BPY100619C00100000)
Entry Price: $0.50 (2/1/10)
Exit Target: $1.00+
Return: -20%
Stop Target: None
September 100 calls (BPYIT, $0.60, flat) (BPY100918C00100000)
Entry Price: $0.95 (2/1/10)
Exit Target: $2.00
Return: -37%
Stop Target: None
Action: Shares traded in a tight range and volume was well below normal as only 13 million shares traded hands. Folks, this means no one was selling and no one was buying. The individual investors are hoping to sell to the mutual fund managers at higher prices or they are simply holding on for the ride.
Fund managers are trying to get the best price possible before the rush comes in to buy the shares but they don’t want to tip their hand.
EMC (EMC, $17.09, up $0.33)
April 19 calls (EMCDS, $0.17, up$0.03) (EMC100417C00019000)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -69%
Stop Target: None
Action: Continue to hold.
Shuffle Master (SHFL, $9.10, up $0.17)
May 10 calls (SFQEB, $0.60, up $0.05) (SFQ100522C00010000)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -29%
Stop Target: 40 cents
Action: Continue to hold.
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert or the limit prices are hit. These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because the portfolio is full.
Nasdaq PowerShares ETF (QQQQ, $43.70, up $0.68)
March 42 puts (QQQ100320P00042000, $0.66, down $0.28)
Action: We are keeping this one on the radar in case we are in a short-term bounce. Next week has not been kind to the markets as the last few years of February have been nasty.
Chipotle Mexican Grill (CMG, $100.60, up $1.09)
February 105 calls (CMG100220C00105000, $1.70, up $0.22)
Action: Chipotle always seems to trade higher after announcing earnings and is on the verge of breaking out to new 52-week highs. We think the calls are a little juiced so we are going to stay on the sidelines.
Panera Bread (PNRA, $73.25, up $0.88)
February 75 calls (UPA100220C00075000, $1.05, up $0.10)
Action: No play for Mr. Gray…
Freeport McMoRan (FCX, $73.39, up $2.30)
February 65 puts ((FCX100220P00065000, $0.27, down $0.23)
March 70 puts (FCX100320P00065000, $1.54, down $0.64)
Action: If copper is getting a bounce like the market then we may be getting some good entry prices on the March puts.
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