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 an “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 but it is rare that we do.
2:15pm (EST)
With the bulls struggling to hold the rebound, let’s keep the other half of this trade open. We will still keep a hard stop of $3.00 into the close but that level has held so far today. Shares are back near $42 so cancel the order to close the trade before the bell unless our $3.00 stop is hit.
We still face a gap higher on Wednesday but our gains are solid and we can still close the position if the puts dip below $3.
Cigna (CI, $42.16, up $1.91)
September 44 puts (CI110917P00044000, $3.70, down $1.30)
Entry Price: $1.20 (8/4/11)
Exit Target: $2.40+ (closed half at $3.50 on 8/8/2011)
Return: 238%
Stop Target: $3.00 (Hard Stop)
Action: Continue to hold the other half. If the $3 stop is hit between now and the close, we will be out. If not, we will see where we are at on Wednesday.
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12:15pm (EST)
PowerShares QQQ (QQQ, $51.97, up $1.38)
September 50 puts (QQQ110917P00050000, $1.80, down $0.80)
Entry Price: $1.55 (8/8/11)
Exit Target: $3.10
Return: 16%
Stop Target: $1.55
Action: We realize this trade could go either way this week but we still believe one more big drop is upon us. The cleansing has been good to see as the market is down 17% over the past few weeks. A 10% downside move is a correction. A 20% slide is a bear market.
Cigna (CI, $42.60, up $2.35)
September 44 puts (CI110917P00044000, $3.40, down $1.60)
Entry Price: $1.20 (8/4/11)
Exit Target: $2.40+ (closed half at $3.50 on 8/8/2011)
Return: 223%
Stop Target: Place a HARD STOP of $3.00 on the other half
Action: The puts have traded to a low of $3.20 after opening at $3.53. Set a HARD STOP of $3.00 on the other half to protect profits. If hit, the average closing price for the trade will be $3.25 since we sold the other half at $3.50 which locks in a gain of 205%. Also, t his is important, if the stop is not triggered 10 minutes before the bell, close the other half of the trade, regardless. We want to lock in this juicy gains and reduce our risk of further upside.
Rambus (RMBS, $10.55, up $0.15)
August 12.50 puts (RMBS110820P00012500, $2.10, down $0.10)
Entry Price: $0.15 (7/29/11)
Exit Target: $1.20+ (closed half at $1.70 on 8/5/2011)
Return: 1,167%
Stop Target: None
Action: CLOSE the other half of the trade at current prices. These options expire in 10 days so let’s lock in profits. We may take a flyer on a September put option if shares break below $10 as there is further weakness to $8-$7 if this level doesn’t hold.
Other 2011 Portfolio OPEN positions (14): These are trades that are still open in the portfolio that have longer expiration dates or 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 the options expire. Click on the 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
RF MicroDevices August 10 calls (from February 2011)
Dendreon August 50 calls (from April 2011)
MGM Resorts International September 17 calls (from May)
Vivus September 10 calls (from May 2011)
Symantec October 20 calls (from June 2011)
Rediff.com India October 15 calls (from June 2011)
Seattle Genetics August 22.50 calls (from June 2011)
September 20 calls (from May 2011)
Global Payments August 55 calls (from July 2011)
TiVo August 11 calls (from July 2011)
iShares Russell 2000 August 86 calls (from July 2011)
Spider S&P 500 August 135 calls (from July 2011)
Spider Dow Jones Industrial Average August 126 calls (from July 2011)
Freeport-McMoRan August 57 calls (from July 2011)
Qualcomm October 65 calls (from July 2011)
Rambus September 17 calls, August 17 calls (from July 2011)
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.
We will update this section in the morning.
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9:00am (EST)
PowerShares QQQ (QQQ, $50.59, down $3.24)
September 50 puts (QQQ110917P00050000, $2.60, up $1.55)
Entry Price: $1.55 (8/8/11)
Exit Target: $3.10
Return: 67%
Stop Target: $1.55
Action: We said Tech looked the weakest of the three indexes but the Russell 2000 fell a whopping 9% yesterday and ended at 650! Our near-term target for the Q’s is for a drop below $50.
Cigna (CI, $40.25, down $4.94)
September 44 puts (CI110917P00044000, $5.00, up $3.10)
Entry Price: $1.20 (8/4/11)
Exit Target: $2.40+ (closed half at $3.50 on 8/8/2011)
Return: 298%
Stop Target: Place a stop of $4.00 on the other half
Action: We left a little on the table yesterday in closing half of the trade but we were controlling our greed and following our trading rules. Our first target for the stock was $42, then $40, but we had no idea both would be hit in the same day. Let’s see how the other half opens and if they are below $4 we may close the other half.
Rambus (RMBS, $10.40, down $1.18)
August 12.50 puts (RMBS110820P00012500, $2.20, up $0.90)
Entry Price: $0.15 (7/29/11)
Exit Target: $1.20+ (closed half at $1.70 on 8/5/2011)
Return: 1200%
Stop Target: None
Action: Rambus traded to a low of $10.09 yesterday. There is also further weakness to $8-$7 if $10 doesn’t hold.
Other 2011 Portfolio OPEN positions (14): These are trades that are still open in the portfolio that have longer expiration dates or 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 the options expire. Click on the 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
RF MicroDevices August 10 calls (from February 2011)
Dendreon August 50 calls (from April 2011)
MGM Resorts International September 17 calls (from May)
Vivus September 10 calls (from May 2011)
Symantec October 20 calls (from June 2011)
Rediff.com India October 15 calls (from June 2011)
Seattle Genetics August 22.50 calls (from June 2011)
September 20 calls (from May 2011)
Global Payments August 55 calls (from July 2011)
TiVo August 11 calls (from July 2011)
iShares Russell 2000 August 86 calls (from July 2011)
Spider S&P 500 August 135 calls (from July 2011)
Spider Dow Jones Industrial Average August 126 calls (from July 2011)
Freeport-McMoRan August 57 calls (from July 2011)
Qualcomm October 65 calls (from July 2011)
Rambus September 17 calls, August 17 calls (from July 2011)
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.
Spider S&P 500 (SPY, $112.26, down $7.82)
August 115 puts (WEEKLY) (SPY11081200115000, $5.10, up $4.10)
Thoughts: These puts opened at $1.96 yesterday and we were trying to get into them at $1.25 when we released the Q’s trade. The options traded to a low of $1.40.
Freeport-McMoRan (FCX, $41.89, down $4.10)
August 45 puts (WEEKLY) (FCX110812P00045000, $3.60, up $2.55)
Thoughts: We said yesterday shares could test $40 and Freeport touched a low of $41.20. We were trying to get into these options for $1.25 at the open for $2.00 and they traded down to $1.53.
Potash (POT, $49.31, down $3.78)
September 60 calls (POT110917C00060000, $0.65, down $0.35)
August 50 puts (POT110820P00050000, $3.00, up $1.95)
August 50 puts (WEEKLY) (POT110812P00050000, $2.20, up $1.45)
Thoughts: The August 50 WEEKLY puts opened at $1.08 and we were hoping to get in for under $1. We said there was risk down to $51 and a break could lead to $48.
Pepsi (PEP, $62.97, down $1.70)
October 67.50 calls (PEP111022C00067500, $1.00, down $0.05)
September 65 calls (PEP110917C00065000, $1.20, down $0.25)
Thoughts: Support is just above $60 and has held over the last few weeks. Watch for now.
Bank of America (BAC, $6.51, down $1.66)
September 7 puts (BAC110917P00007000, $1.40, up $0.95)
May (2012) 15 calls (BAC120519C00015000, $0.15, up $0.05)
Thoughts: Wow. That is all we have to say.
General Electric (GE, $15.43, down $1.08)
September 16 calls (GE110917C00016000, $0.60, down $0.15)
Thoughts: The 52-week low for GE is $14.25 and shares are right there.
Lufkin Industries (LUFK, $61.93, down $7.90)
September 80 calls (LUFK110917C00080000, $0.80, down $0.35)
Thoughts: Watch for now.
PNC Financial Services (PNC, $46.99, down $4.19)
September 55 calls (PNC110917C00055000, $1.10, down $1.20)
Thoughts: There aren’t many financial stocks you can trust but we like PNV if there is a rebound. There is talk of lowering the capital gains tax which would be a huge boost to the market and maybe the financials.
Rosetta Resources (ROSE, $41.53, down $3.48)
September 50 calls (ROSE110917C00050000, $2.00, down $0.40)
Thoughts: There is super-strong support at $40 and if it holds into another selloff we like these calls for a rebound back to $50.
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