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 “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. Closed Trades for 2012 (135-43, or 76% win rate, including Weekly Wrap which is 24-0).
12:30pm (EST)
NEW TRADES!!!
Intel (INTC, $21.66, down $0.02)
Buy to OPEN November 21 puts (INTC121117P00021000, $0.50, flat)
Action: The options are pretty active as 500 contracts have traded today. Use limit order up to 55 cents but do not pay over 60 cents to establish positions. We have a near-term target of $20 for the stock with a chance shares test $18.
SolarWinds (SWI, $53.18, down $0.13)
Buy to OPEN November 45 puts (SWI121117P00045000, $0.65, up $0.05)
Action: Use limit orders up to 80 cents but do not pay over 85-90 cents to establish positions
Current Trades
PowerShares QQQ (QQQ, $66.77, up $0.06)
November 66 puts (QQQ121117P00066000, $1.15, up $0.05)
Entry Price: $0.95 (10/9/12)
Exit Target: $1.90
Return: 21%
Stop Target: None
Action: We have a near-term target of $65 and a mid-November target of $63. This would make these puts worth $3 for a 200% return if $63 triggers. Resistance is at $70.
Sina (SINA, $60.96, down $0.57)
November 50 puts (SINA121117P00050000, $0.80, up $0.05)
Entry Price: $1.00 (10/9/12)
Exit Target: $2.00
Return: -17%
Stop Target: None
Action: Resistance is at $62. We would like to see a close below $60 today and shares have traded down to $60.45 today. Our near-term target is for a test to $55. If this level fails to hold, shares could tumble to the mid-$40’s.
Citrix Systems (CTXS, $67.17, down $0.45)
November 60 puts (CTXS121117P00060000, $1.50, flat)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 49%
Stop Target: $1.05
Action: We would like to see a close below $65 today but we would be happy with $66.
JC Penney (JCP, $25.91, down $0.27)
November 22 puts (JCP121117P00022000, $0.45, flat)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -53%
Stop Target: None
Action: These options have over a month before they expire and there is risk up to $28 which is also the 200-day MA. Although the puts took a hit yesterday we still like the trade.
This is our third JCP trade and the first two recommendations made 100% each. The second trade was down over 50% when shares made a two-day surge from resistance at $26 to $32.55 that produced a long-wick candlestick. We said to hold the position and the trade ended up making 100%. We are looking for this one to do the same.
Buffalo Wild Wings (BWLD, $88.04, down $0.21)
November 70 puts (BWLD121117P00070000, $0.80, flat)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -36%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100. We would like to see shares close below $85 this week which should get $80 back in play. Earnings are due out on October 23.
TiVo (TIVO, $9.88, flat)
November 10 calls (TIVO121117C00010000, $0.40, flat)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: There is risk down to $9.50-$9.00 on continued weakness and earnings aren’t due out until late November. A break below $9 might force us out the trade but we still believe shares will be pushing $12 by mid-November.
KLA-Tencor (KLAC, $44.96, up $0.06)
October 45 puts (KLAC121020P00045000, $0.45, down $0.30)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10 (closed half at 65 cents on 10/11/12)
Return: 0%
Stop Target: None
Action: We are going to roll with this the other half of this trade into next week as we feel a test to $43 could come by next Friday.
Solazyme (SZYM, $10.00, down $0.27)
December 12.50 calls (SZYM121222C00012500, $0.30, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -57%
Stop Target: None
Action: We would like to see a close above $10 today.
Other 2012 Portfolio OPEN positions (5): 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.
Apollo GroupOctober 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012) – Faces resistance at $73
Bank of America January 12.50 calls (2013) (from March 2012) – a move above $10 would be bullish and have us looking to add to the position.
Tiffany & Co. October 60 puts (from September 2012) – We still feel there is a good chance shares retreat and fall below $60.
Knight Capital Group January 2.50 calls (2013) (from August 2012) – takeover target
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 the Watch List on Monday with some fresh ideas.
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11:30am(EST
Special Notice: We are closing these two trades to save a little premium. Both stocks face resistance that probably won’t be cleared and on Monday the premiums will take another hit due to time decay. If we close them now, we can use these proceeds to open NEW TRADES next week.
Akamai Technologies October 40 calls (from September 2012) – We had a brief window on Monday to close this trade for a profit after shares broke above $40 but shares faded and haven’t recovered this week. You should be able to get 15 cents for these calls so go ahead and close them at current levels.
eBay October 52.50 calls (from September 2012) – We wanted to see shares above $50 today but no such luck. The options are bidding 20 cents so close the trade at current levels.
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9:00am (EST)
PowerShares QQQ (QQQ, $66.71, down $0.21)
November 66 puts (QQQ121117P00066000, $1.10, flat)
Entry Price: $0.95 (10/9/12)
Exit Target: $1.90
Return: 16%
Stop Target: None
Action: We have a near-term target of $65 and a mid-November target of $63. This would make these puts worth $3 for a 200% return if $63 triggers. Resistance is at $70.
Sina (SINA, $61.53, down $0.30)
November 50 puts (SINA121117P00050000, $0.75, flat)
Entry Price: $1.00 (10/9/12)
Exit Target: $2.00
Return: -25%
Stop Target: None
Action: Resistance is at $62. We would like to see a close below $60 today and our near-term target is for a test to $55. If this level fails to hold, shares could tumble to the mid-$40’s.
Citrix Systems (CTXS, $67.62, down $1.08)
November 60 puts (CTXS121117P00060000, $1.50, up $0.35)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 49%
Stop Target: $1.05
Action: Citrix fell to a low of $66.23 while the puts reached a high of $1.65. We would like to see a close below $65 today but we would be happy with $66. Shares traded to a high of $70.25 at the open on an analyst upgrade before fading and resistance at $70 is holding. We have listed a Stop Target of $1.05 and it is not a Hard Stop, yet.
JC Penney (JCP, $26.18, up $2.03)
November 22 puts (JCP121117P00022000, $0.45, down $0.35)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -53%
Stop Target: None
Action: These options have over a month before they expire and there is risk up to $28 which is also the 200-day MA. Although the puts took a hit yesterday we still like the trade.
This is our third JCP trade and the first two recommendations made 100% each. The second trade was down over 50% when shares made a two-day surge from resistance at $26 to $32.55 that produced a long-wick candlestick. We said to hold the position and the trade ended up making 100%. We are looking for this one to do the same.
Buffalo Wild Wings (BWLD, $88.25, up $0.61)
November 70 puts (BWLD121117P00070000, $0.80, down $0.10)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -36%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100. We would like to see shares close below $85 this week which should get $80 back in play. Earnings are due out on October 23.
TiVo (TIVO, $9.88, up $0.03)
November 10 calls (TIVO121117C00010000, $0.40, flat)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: There is risk down to $9.50-$9.00 on continued weakness and earnings aren’t due out until late November. A break below $9 might force us out the trade but we still believe shares will be pushing $12 by mid-November.
KLA-Tencor (KLAC, $44.90, down $0.65)
October 45 puts (KLAC121020P00045000, $0.75, up $0.20)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10 (closed half at 65 cents on 10/11/12)
Return: 27%
Stop Target: None
Action: We closed HALF of the trade yesterday because we didn’t want to see this trade turn out like AKAM. Shares did close below $45 which was bearish. We may close these options out today and roll the position into November so stay on the lookout this morning for a possible update.
Solazyme (SZYM, $10.27, up $0.23)
December 12.50 calls (SZYM121222C00012500, $0.30, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -57%
Stop Target: None
Action: We would like to see a close above $10 today.
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.
Apollo GroupOctober 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012) – Faces resistance at $73
Bank of America January 12.50 calls (2013) (from March 2012) – a move above $10 would be bullish and have us looking to add to the position.
eBay October 52.50 calls (from September 2012) – We may close by Friday if shares are not above $50.
Tiffany & Co. October 60 puts (from September 2012) – We still feel there is a good chance shares retreat and fall below $60.
Knight Capital Group January 2.50 calls (2013) (from August 2012) – takeover target
Akamai Technologies October 40 calls (from September 2012) – teasing us after popping above $40 on Monday
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.
Intel (INTC, $21.68, down $0.08)
November 21 puts (INTC121117P00021000, $0.50, up $0.02)
Thoughts: Shares have Intel hit another fresh 52-week low yesterday of $21.52 and could be headed to $18 before a bottom sets in At $20, the trade would be a double.
Morgan Stanley (MS, $17.86, up $0.46)
November 18 calls (MS121117C00018000, $0.80, up $0.20)
Thoughts: Watch for now.
Valero Energy (VLO, $29.14, down $0.33)
November 34 calls (VLO121117C00034000, $0.15, down $0.05)
November 31 puts (VLO121117P00031000, $2.60, up $0.10)
Thoughts: A move above $34 could lead to a run at $40 while a drop below $31 would be bearish. This would have been a great strangle trade from when we first profiled it.
LinkedIn (LNKD, $113.77, up $1.79)
November 95 puts (LNKD121117P00095000, $1.60, down $0.25)
Thoughts: Shares made a back test to $115 but we feel LinkedIn could drop below $100 over the next month.
Taiwan Semiconductor Manufacturing (TSM, $15.03, down $0.09)
January 15 calls (TSM130119C00015000, $0.75, down $0.10)
November 15 calls (TSM121117C00015000, $0.50, down $0.10)
Thoughts: There is risk down to $15 and we would wait for a move back above $16 before considering these options.
SolarWinds (SWI, $53.31, down $0.26)
November 47.50 puts (SWI121117P00047500, $1.10, flat)
Thoughts: Shares could be headed south of $50 to the mid-$40’s. Watch for now.
First Solar (FSLR, $21.72, up $0.68)
November 18 puts (FSLR121117P00018000, $0.90, down $0.15)
October 20 puts (FSLR121020P00020000, $0.30, down $0.25)
Thoughts: We would like to see shares test $22 which is where we may go short again.
American Express (AXP, $58.47, up $0.50)
November 60 calls (AXP121117C00060000, $0.80, up $0.10)
Thoughts: Shares could make a run past $60 if the Financial stocks show strength.