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).
PowerShares QQQ (QQQ, $66.92, down $0.34)
November 66 puts (QQQ121117P00066000, $1.10. up $0.05)
Entry Price: $0.95 (10/9/12)
Exit Target: $1.90
Return: 16%
Stop Target: None
Action: The QQQ”s traded down to $68.80 yesterday. 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, $61.83, up $1.47)
November 50 puts (SINA121117P00050000, $0.75, down $0.25)
Entry Price: $1.00 (10/9/12)
Exit Target: $2.00
Return: -25%
Stop Target: None
Action: We mentioned there could be a back test to $62 and shares reached a peak of $61.98 yesterday. 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, $68.70, up $0.56)
November 60 puts (CTXS121117P00060000, $1.20, down $0.10)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 19%
Stop Target: None
Action: We would like to see a close below $65 this week and $70 hold if shares rebound. Wednesday’s high was $69.39.
JC Penney (JCP, $24.15, down $0.24)
November 22 puts (JCP121117P00022000, $0.80, up $0.05)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -16%
Stop Target: None
Action: Resistance is at $24-$25. We are looking for a close below $22 this week which should get $20 and the teens back in play. At $20 the trade is a double and at $19 we would hit a 200% return.
Buffalo Wild Wings (BWLD, $87.64, up $0.66)
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. 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, $9.85, down $0.25)
November 10 calls (TIVO121117C00010000, $0.40, down $0.10)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: There is now 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, $45.55, down $0.92)
October 45 puts (KLAC121020P00045000, $0.55, up $0.20)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: 0%
Stop Target: None
Action: We set limit orders to close half of the trade at 75 cents or better yesterday but let’s raise it to $1 or better. We will need another breakdown over the next 2 days and a close below $45 but we should get there.
Solazyme (SZYM, $10.04, down $0.26)
December 12.50 calls (SZYM121222C00012500, $0.30, down $0.10)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -57%
Stop Target: None
Action: Shares held $10 yesterday but face risk down to $9.
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 Group October 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, $21.76, down $0.14)
November 21 puts (INTC121117P00021000, $0.48, up $0.04)
Thoughts: Shares have Intel hit another fresh 52-week low yesterday and could be headed to the teens. At $20, the trade would be a double.
Morgan Stanley (MS, $17.40, up $0.05)
November 18 calls (MS121117C00018000, $0.60, flat)
Thoughts: There are a couple of earnings from the Financial sector that will hit Wall Street tomorrow. Instead of playing JPMorgan or Wells, we may play Morgan Stanley for a run to $20 by mid-November.
Valero Energy (VLO, $29.47, down $1.93)
November 34 calls (VLO121117C00034000, $0.20, down $0.35)
November 31 puts (VLO121117P00031000, $2.50, up $1.15)
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, $111.98, down $1.09)
November 95 puts (LNKD121117P00095000, $1.85, up $0.10)
Thoughts: Shares coud be headed below $100.
Taiwan Semiconductor Manufacturing (TSM, $15.12, down $0.24)
January 15 calls (TSM130119C00015000, $0.85, down $0.15)
November 15 calls (TSM121117C00015000, $0.60, 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, $53.57, down $1.14)
November 47.50 puts (SWI121117P00047500, $1.10, up $0.30)
Thoughts: Shares could be headed south of $50 to the mid-$40’s. Watch for now.
First Solar (FSLR, $21.04, up $0.24)
November 18 puts (FSLR121117P00018000, $1.05, down $0.15)
October 20 puts (FSLR121020P00020000, $0.55, down $0.20)
Thoughts: We would like to see shares test $22 which is where we may go short again.
American Express (AXP, $57.97, down $0.27)
November 60 calls (AXP121117C00060000, $0.65, down $0.10)
Thoughts: Shares could make a run past $60 if the Financial stocks show strength.