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 an “Alert” or “Trade Update” 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 but it is rare that we do.
1:50pm (EST)
Comcast (CMCSA, $25.19, up $0.47)
April 26 calls (CMCSA11041600026000, $0.45, up $0.15)
Entry Price: $0.67 (3/3/11)
Exit Target: $1.25
Return: -33%
Stop Target: None
Action: These options have 36 days before expiration. Continue to hold.
Electronic Arts (ERTS, $18.40, down $0.13)
April 20 calls (ERTS110416C00020000, $0.30, down $0.05)
Entry Price: $0.65 (2/25/11)
Exit Target: $1.30
Return: -54%
Stop Target: None
Action: Continue to hold.
Dupont (DD, $52.76, up $0.17)
March 55 calls (DD110319C00055000, $0.10, down $0.05)
Entry Price: $0.75 (2/25/11)
Exit Target: $1.50+
Return: -87%
Stop Target: None
Action: These options expire in a week before expiration and shares will need to move 5% higher.
RF MicroDevices (RFMD, $6.25, down $0.05)
August 10 calls (RFMD110820C00010000, $0.15, flat)
Entry Price: $0.30 (2/24/11)
Exit Target: $1.00+
Return: -50%
Stop Target: None
Action: These options have 162 days before they expire. Shares are cheap and if you own an IRA, buy some at these low levels because we think the stock could hit $10+ over the next 6-12 months. Continue to hold.
eBay (EBAY, $31.04, down $0.04)
July 40 calls (EBAY110716C00040000, $0.25, flat)
Entry Price: $0.78 (2/16/11)
Exit Target: $1.60+
Return: -68%
Stop Target: None
Action: Continue to hold.
Skyworks Solutions (SWKS, $31.87, up $0.23)
May 40 calls (SWKS110521C00040000, $0.55, up $0.05)
Entry Price: $1.50 (2/11/11)
Exit Target: $3.00+
Return: -63%
Stop Target: None
Action: Continue to hold.
Other 2011 Portfolio OPEN positions (6): 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.
Biodel March 7.50 calls (from October 2010)
American Tower April 60 calls (from October 2010)
Vivus June 14 calls (from January 2011)
Akamai Technologies March 55 calls (from February 2011)
Patriot Coal March 30 calls (from January 2011)
CurrencyShares Euro Trust March 134 puts (from January 2011)
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert. These 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 also try not to have more than 12-15 open trades at one time. We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.
We will update this section on Monday with some fresh ideas.
========================
8:50am (EST)
Special Update: We know there have been opportunities to make some trades recently and for those of you just joining us this hasn’t been the best time to invest due to the volatility. We talk a lot about support and resistance for the market and we usually nail these levels on a daily basis. Yesterday was no different and we have been mentioning this 3-week trading range we have been stuck in.
We have also been preparing for this which is why our current trades are longer-term options. We currently have 5 March positions that will expire next Friday. Most of them were from October 2010 and from January of this year.
Since October 2010 we have closed 43 out of 50 winning trades with numerous triple-digit winners but at some point we knew some trades would/ could get caught. It is only natural when a trend is changing or the market gets stuck in a range. What we have learned in trading ranges is that it is best to play strangle and straddle option trades which is why we have been profiling them over the past few weeks. Straddles and Strangles are using both calls and puts.
Yes, we have missed some great trades but this is why we created the Watch List. However, what we don’t want is to have too many OPEN positions in our portfolio because everything we do is risk calculated. If we closed all of the trades today, the 2011 portfolio would still show a gain for the year. We know many new subscribers are frustrated and we are too but also realize we have used “cheap” out-of-the-money calls for stocks that are strong leaders in their respective fields. Some are takeover targets. We consider an option cheap if it is under 75 or 50 cents and it is our way of building positions in momentum stocks.
You saw what happened to Green Mountain yesterday and you will see a few more examples of straddles and strangles trades coming soon if we continue to stay in this range. Again, we don’t want you to overtrade your account why is why we haven’t been aggressive during the recent volatility, yet. It’s also why we haven’t issued any new trades. Although we are in a trading range, we expect the volatility to continue and we plan to take full advantage of it in the next week or so.
Today could be a clear indicator of what we can expect for next week and while our hopes are we get a bounce, we will be fully prepared to start using puts if the market continues to test lower support levels.
Comcast (CMCSA, $24.72, down $0.59)
April 26 calls (CMCSA11041600026000, $0.30, down $0.20)
Entry Price: $0.67 (3/3/11)
Exit Target: $1.25
Return: -55%
Stop Target: None
Action: These options have 36 days before expiration. Continue to hold.
Electronic Arts (ERTS, $18.53, down $0.09)
April 20 calls (ERTS110416C00020000, $0.35, down $0.05)
Entry Price: $0.65 (2/25/11)
Exit Target: $1.30
Return: -46%
Stop Target: None
Action: Continue to hold.
Dupont (DD, $52.59, down $1.12)
March 55 calls (DD110319C00055000, $0.15, down $0.20)
Entry Price: $0.75 (2/25/11)
Exit Target: $1.50+
Return: -80%
Stop Target: None
Action: These options expire in a week before expiration and shares will need to move 5% higher. Our last trade we recommended with an option that had less than 3 weeks before expiration was JPMorgan. The trade was down just like this one before ending up with a double-digit gain.
RF MicroDevices (RFMD, $6.30, up $0.01)
August 10 calls (RFMD110820C00010000, $0.15, flat)
Entry Price: $0.30 (2/24/11)
Exit Target: $1.00+
Return: -50%
Stop Target: None
Action: These options have 162 days before they expire. Shares are cheap and if you own an IRA, buy some at these low levels because we think the stock could hit $10+ over the next 6-12 months. Continue to hold.
eBay (EBAY, $31.08, down $0.25)
July 40 calls (EBAY110716C00040000, $0.25, flat)
Entry Price: $0.78 (2/16/11)
Exit Target: $1.60+
Return: -68%
Stop Target: None
Action: Continue to hold.
Skyworks Solutions (SWKS, $31.64, down $0.37)
May 40 calls (SWKS110521C00040000, $0.50, down $0.10)
Entry Price: $1.50 (2/11/11)
Exit Target: $3.00+
Return: -67%
Stop Target: None
Action: Continue to hold.
Other 2011 Portfolio OPEN positions (6): 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.
Biodel March 7.50 calls (from October 2010)
American Tower April 60 calls (from October 2010)
Vivus June 14 calls (from January 2011)
Akamai Technologies March 55 calls (from February 2011)
Patriot Coal March 30 calls (from January 2011)
CurrencyShares Euro Trust March 134 puts (from January 2011)
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert. These 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 also try not to have more than 12-15 open trades at one time. We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.
Areopostale (ARO, $24.63, up $0.29)
March 24 puts (ARO110319P00024000, $0.70, up $0.10)
Thoughts: We said shares could fall 7%-10% yesterday and they did in after-hours last night. Those losses held as shares are down $2 before the bell. These options traded to a low of 45 cents yesterday and if you are in the trade, close into strength this morning.
National Semiconductor (NSM, $14.16, down $0.31)
March 14 puts (NSM110319P00014000, $0.50, up $0.15)
Thoughts: These options opened at 35 cents yesterday and traded down to 30 cents. Shares were under $14 in after-hours trading last night at one point.
Spider S&P 500 (SPY, $129.94, down $2.45)
April 125 puts (SPY110416P00125000, $1.75, up $0.50)
April 135 calls (SPY110416P00135000, $0.80, down $0.45)
Thoughts: We profiled this strangle trade for the S&P on Tuesday when both options were at $1.25. The goal would be to close whichever side of the trade hits $2.60, first. We would then have a “FREE” trade on the other side. So far, so good.
Alcoa (AA, $15.80, down $0.50)
April 17 calls (AA110416C00017000, $0.30, down $0.20)
Thoughts: If there is a rebound next week AA could bounce with the Dow. Continue to watch.
General Electric (GE, $20.10, down $0.53)
April 21 calls (GE110416C00021000, $0.35, down $0.15)
Thoughts: We actually like GE as a covered call trade for our Weekly Wrap but that is another story. Watch for now but this might be our number one trade on a break above Dow 12,250.
McDonald’s (MCD, $76.68, up $0.90)
June 80 calls (MCD110618C00080000, $1.30, up $0.40)
Thoughts: We have been trying to get the June 80’s for 50 cents and there have been plenty of opportunities to get in and out of these calls for some nice profits if you day trade options. The safe money is coming out of risk and rolling it over to the Golden Arches.
Walt Disney (DIS, $42.47, down $0.65)
April 45 calls (DIS110416C00045000, $0.40, down $0.15)
Thoughts: Continue to watch.
Imax (IMAX, $27.90, down $0.58)
June 30 calls (IMAX110618C00030000, $1.60, down $0.30)
Thoughts: If shares get back to $25-$26 and hold, we may have to added one of our favorite trades back into the mix. Watch for now.
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