9:10am (EST)
Imax (IMAX, $12.56, up $0.26)
March 12.50 calls (IMQCV, $1.10, up $0.10) (IMQ100320C000125000)
Entry Price: $1.25 (2/4/10)
Exit Target: $1.75-$1.85
Return: -12%
Stop Target: 60 cents
Action: Imax rebounded with the rest of the market and was up near $13 in after-hours Friday night. One of the talking heads was talking about the 3D revolution headed our way and that it shouldn’t be underestimated. Of course, we were way ahead of the curve as we have been following Imax shares for over 3 years.
Word is all movies will be 3D by 2015 and Imax figures to be one of the leaders bringing that experience to the forefront. They already have with the success of Avatar which we told you back in October might be the biggest movie of all-time. Two billion later in revenues and it is.
Get this though. Imax accounts for only 2% of the screens showing the movie but makes up nearly 20% of box-office sales. The film has already generated over $150 million sales for Imax theaters and we doubt the few analysts who cover the stock have accounted for these types of numbers.
The company should be reporting earnings in the next few weeks.
Berkshire Hathaway Class B (BRK/B, $73.57, up $0.96)
June 100 calls (BPYFT, $0.30, flat) (BPY100619C00100000)
Entry Price: $0.50 (2/1/10)
Exit Target: $1.00+
Return: -40%
Stop Target: None
September 100 calls (BPYIT, $0.45, flat) (BPY100918C00100000)
Entry Price: $0.95 (2/1/10)
Exit Target: $2.00
Return: -53%
Stop Target: None
Action: We liked the late day action on Friday but we 4 months before the June options expire and 7 months before the September options expire.
EMC (EMC, $16.82, up $0.19)
April 19 calls (EMCDS, $0.16, flat) (EMC100417C00019000)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -70%
Stop Target: None
Action: Continue to hold.
Shuffle Master (SHFL, $8.92, down $0.03)
May 10 calls (SFQEB, $0.55, flat) (SFQ100522C00010000)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -35%
Stop Target: 40 cents
Action: The bid is 50 cents while the ask is 65 cents. These options have 102 days before they expire.
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert or the limit prices are hit. These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because the portfolio is full.
Apollo Group (APOL, $59.93, down $0.48)
February 55 puts (OAQ100220P00055000, $0.55, up $0.10)
March 55 puts (OAQ100320P00055000, $1.60, up $0.20)
Action: Apollo broke below $60 and traded to a low of $59.40. We are hoping for a bounce back to $64 before we consider jumping in but we may not get that opportunity. If shares remain weak there is a chance that they could trade down to $57-$58. A break below that leads to double nickels.
CBOE Volatility Index (VIX, 26.11, up 0.03)
February 27.50 calls (VIXBY, $1.20, down $0.10)
March 30 calls (VIXCF, $1.70, down $0.10)
Action: If the market has a serious correction or continues lower at a steady pace then the VIX will rise. We are hoping for a market bounce and maybe we can get into these options at lower prices.
Nasdaq PowerShares ETF (QQQQ, $42.98, up $0.36)
February 43 puts (QQQNQ, $0.79, down $0.16) (QQQ100220P00043000)
March 42 puts (QQQOP, $1.03, down $0.11) (QQQ100320P00042000)
Action: If the market gets a bounce these options will get cheaper which is what we are hoping for.
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