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 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 2013: 23-7, for a 77% win rate, including the Weekly Wrap that is 6-1).
12:15pm (EST)
iShares Dow Jones Transportation Average (IYT, $106.42, down $0.25)
April 100 puts (IYT130420P00100000, $0.95, up $0.05)
Entry Price: $0.90 (2/27/13)
Exit Target: $1.80
Return: 6%
Stop Target: None
Action: There is risk to $110+ on a continued breakout but we are looking for a drop below $100 by mid-April. A finish below $105 today would be bearish and the iShares traded to a low of $105.42 shortly after the open.
Potash (POT, $39.51, down $0.59)
March 38 puts (POT130316P00038000, $0.25, up $0.10)
Entry Price: $0.50 (2/26/13)
Exit Target: $1.00
Return: -50%
Stop Target: None
Action: Shares are back below $40 so we are going to stick with the trade into next week.
Cyberonics (CYBX, $45.93, up $0.18)
April 40 puts (CYBX130420P00040000, $0.95, up $0.10)
Entry Price: $0.75 (2/26/13)
Exit Target: $1.50
Return: 27%
Stop Target: None
Action: We would like to see a close below $45 today and the low has checked in at $45.18 this morning. We have a near-term target of $40 for the stock with a shot at the mid-$30’s coming into play.
Allstate (ALL, $46.15, up $0.13)
April 43 puts (ALL130420P00043000, $0.40, flat)
Entry Price: $0.60 (2/26/13)
Exit Target: $1.20
Return: -33%
Stop Target: None
Action: We have a near-term target of $42 for shares which should get us a double on the put options. There is risk up to $47 and yesterday’s high was $46.34.
Cree (CREE, $45.38, up $0.15)
March 42 puts (CREE130316P00042000, $0.40, flat)
Entry Price: $0.85 (2/21/13)
Exit Target: $1.70
Return: -53%
Stop Target: None
Action: There is risk to $47 and yesterday’s peak was $46.04. We would like to see a close below $44.75 today which was last Friday’s close.
Keryx Biopharmaceuticals (KERX, $7.11, up $0.68)
June 10 calls (KERX130622C00010000, $0.45, up $0.10)
Entry Price: $0.70 (2/12/13)
Exit Target: $1.50
Return: -36%
Stop Target: None
Action: Shares are up over 10% on rumors GlaxoSmithKline (GSK, $44.11, up $0.08) could make a bid for the company. If so, expect a buyout offer north of $10.
ADT (ADT, $47.89, down $0.10)
March 50 calls (ADT130316C00050000, $0.25, flat)
Entry Price: $0.90 (1/28/13)
Exit Target: $0.90
Return: -54%
Stop Target: None
Action: We would like to see a close above $48 today.
Taiwan Semiconductor (TSM $18.25, flat)
April 20 calls (TSM130420C00020000, $0.15, flat)
Entry Price: $0.25 (1/3/13)
Exit Target: $0.50
Return: -40%
Stop Target: None
Action: These are April options and while there could be a pullback over the near-term we do feel shares will make a run past $20 by mid-April. These options were only a quarter when we entered the trade so we still like the risk/ reward the trade offers.
MGM Resorts International (MGM, $12.52, up $0.03)
June 15 calls (MGM130622C00015000, $0.25, flat)
Entry Price: $0.40 (1/2/13)
Exit Target: $0.80
Return: -38%
Stop Target: None
Action: We would like to see a close above $12.75 today and the talking heads are all over the online gambling story. Of course, we have been talking this chatter for months now and we expect more states to join the party over the next few months. These are June options so we still have plenty of time for this trade to play out.
Other 2013 Portfolio OPEN positions (2): 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.
Vivus March 17 calls (from January 2013)
Apache March 90 calls (from February 2013)
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 on Monday with some fresh ideas.