9:05am (EST)
Berkshire Hathaway Class B (BRK/B, $73.75, up $2.39)
February 74 calls (BVQBX, $2.25, up $1.15)
Entry Price: $1.50 (1/21/10)
Exit Target: $3.00
Return: 50%
Stop Target: None
Action: Our options gained over 100% yesterday which has given us a 50% profit from our entry price. We would love to see these calls hit the exit target of $3.00 today and if they do CLOSE HALF OF THE TRADE. You don’t want to hold this big of a gain over the weekend without taking something off the table. It makes it a risk-free trade and you can enjoy further gains on the other half if shares continue higher.
Shares were over $74 in pre-market trading.
EMC (EMC, $17.04, down $0.54)
April 19 calls (EMCDS, $0.28, down $0.06)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -49%
Stop Target: None
Action: Continue to hold.
Shuffle Master (SHFL, $8.88, down $0.02)
May 10 calls (SFQEB, $0.65, flat)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -24%
Stop Target: 40 cents
Action: Continue to hold.
Research In Motion (RIMM, $64.60, up $0.89)
Feb 60 puts (RFYNL, $0.75, down $0.15)
Entry Price: $1.50 (1/6/10)
Exit Target: $2.20
Return: -50%
Stop Target: 75 cents
Action: RIMM broke back above its 50-day moving average yesterday which has pushed the trade back down to our stop target. We still believe shares trade below $60 but we may have to go with the March put options. Let’s see how the current put options open but we may be forced to close the trade if RIMM continues higher.
We mentioned yesterday how we thought RIMM and BRK/B could go in opposite directions so this will help offset some of the losses. Close the RIMM trade if shares trade over $66 this morning. We will not send out an alert because this level will probably be broken at the open.
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