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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 (131-43, or 75% win rate, including Weekly Wrap which is 24-0).
12:00pm (EST)
NEW TRADE!!!
Citrix Systems (CTXS, $69.95, down $1.62)
Buy to OPEN November 60 puts (CTXS121117P00060000, $1.05, up $0.15)
Action: Use limit orders up to $1.15 but do not pay over $1.25 to establish positions.
CURRENT TRADES
JC Penney (JCP, $23.93, down $0.03)
November 22 puts (JCP121117P00022000, $0.90, flat)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -5%
Stop Target: None
Action: Shares have traded up $24.04 and are hovering near the flat line. We are looking for a close below $22 this week which should get $20 and the teens back in play.
First Solar (FSLR, $20.51, up $0.44)
October 20 puts (FSLR121020P00020000, $0.90, down $0.40)
Entry Price: $0.85 (9/28/12)
Exit Target: $1.70 (closed half at $1.25 on 10/5/12)
Return: 26%
Stop Target: 90 cents (Hard Stop)
Action: Our Hard Stop of 90 cents on the other half of the trade has been triggered as the puts have traded down to 85 cents. All positions should be closed and we still made a nice double-digit profit after being down nearly 50%. We will be back to play this name.
Buffalo Wild Wings (BWLD, $87.48, up $0.46)
November 70 puts (BWLD121117P00070000, $0.90, down $0.05)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -28%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100 and new 52-week highs. 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, $10.15, down $0.16)
November 10 calls (TIVO121117C00010000, $0.60, down $0.10)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -14%
Stop Target: None
Action: We are looking for a close above $10.50 which has been short-term resistance. A move above this level should lead to a run at $11-$11.50. Support should hold at $10 on a pullback.
KLA-Tencor (KLAC, $46.84, down $0.28)
October 45 puts (KLAC121020P00045000, $0.30, flat)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -45%
Stop Target: None
Action: Resistance has held at $48 with risk to $50 and a break above this level will crush the premiums left in these puts. We would like to see a close below $46 this week and our breakeven point on the trade is $44.45. A break below $46 should lead to the low $40’s but we are running out of time as these option expire next Friday.
Akamai Technologies (AKAM, $39.83, up $0.42)
October 40 calls (AKAM121020C00040000, $0.80, up $0.15)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -11%
Stop Target: None
Action: Akamai cleared $40 shortly after the open and the calls have traded up to $1.09, giving us a profit before slipping. We would like to see a close above $40 today as it could lead to a quick trip to $42.
Taiwan Semiconductor Manufacturing (TSM, $15.58, down $0.49)
January 15 calls (TSM130119C00015000, $1.50, down $0.10)
Entry Price: $0.90 (9/11/12)
Exit Target: $1.80 (stopped out at $1.20 on 10/8/12)
Return: 33%
Stop Target: $1.30 (HARD STOP)
Action: Our Hard Stop on this trade was hit at the open as the puts started the session at $1.20. Perhaps we tipped our hands to the market makers but we will be back to play this name as well if $15 holds.
Solazyme (SZYM, $10.72, down $0.24)
December 12.50 calls (SZYM121222C00012500, $0.40, down $0.10)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Support has been solid at $11 with backup at $10.
Knight Capital Group (KCG, $2.56, down $0.02)
January 2.50 calls (2013) (KCG130119C00002500, $0.30, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -45%
Stop Target: None
Action: There is still risk down to $2. Shares were near $2.80 when we entered this trade back in August after tumbling from $10 to $2.50 in late July on the company’s trading fiasco. We think a buyout offer north of $5 could be in the cards by yearend.
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 Group October 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012)
Bank of America January 12.50 calls (2013) (from March 2012)
eBay October 52.50 calls (from September 2012)
Tiffany & Co. October 60 puts (from September 2012)
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.