1:10pm (EST)
Berkshire Hathaway Class B (BRK/B, $74.39, up $0.16)
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: No love yet despite a big day for stocks. That could be good or bad but let’s see how this week goes before rushing to judgment.
EMC (EMC, $17.06, up $0.22)
April 19 calls (EMCDS, $0.19, up $0.02) (EMC100417C00019000)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -65%
Stop Target: None
Action: Continue to hold.
Shuffle Master (SHFL, $9.00, up $0.15)
May 10 calls (SFQEB, $0.55, up $0.05) (SFQ100522C00010000)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -35%
Stop Target: 40 cents
Action: Continue to hold.
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.
Nasdaq PowerShares ETF (QQQQ, $43.18, up $0.51)
February 43 puts (QQQNQ, $0.47, down $0.39) (QQQ100220P00043000)
March 42 puts (QQQOP, $1.05, down $0.10) (QQQ100320P00042000)
Action: This rally could be bigger than we want to believe. The reason we say that is because EVERYONE is calling for a correction but all that has been hurting the market is Washington and the PIGS. If this issue clear up or reside then the bulls could have only been resting for the next leg up.
It is still too early to tell which is why we are kind of on the sidelines right now. We have some trades open that will benefit if the market continues higher but things are just too volatile to make any long-term bets at this point.
Baidu (BIDU, $438.25, down $3.98
The options are super inflated and there is no good trade we see using any combination of options. The February 400 puts (BPJ100220P00400000, $5.50) would not be “in-the-money” unless Baidu dropped 10%, or 40 points. There may be an opportunity to make a small return by going short but it’s not worth the risk.
The February 500 calls (BPJ100220C00500000, $2.40, down $0.44) are “cheap” but Baidu would have to impress the hell out of Wall Street to take it past its 52-wek high of $470, let alone $500. Although that is possible, we also don’t like the risk of going long.
NEW TRADE!!!
Walt Disney (DIS, $29.80, up $0.32)
For you risk takers, the February 30 calls (DIS100220C000300000, $0.59, up $0.04) look like a good trade and would double if Disney makes it to $31. Let’s roll the dice with this one. Use limit order up to 75 cents.
*******
9:00am (EST)
Berkshire Hathaway Class B (BRK/B, $74.23, up $0.66)
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: It looks like this stock will be added to the S&P on Friday which is the news we wanted to hear over the short-term. This is a terrible market so we don’t know how much demand is going to come from the individual investors but the mutual fund managers will start buying shares now.
There is also a chance we get a pop this week and fade next week so let’s hope we get a good run over the next few days.
EMC (EMC, $16.84, up $0.02)
April 19 calls (EMCDS, $0.17, up $0.01) (EMC100417C00019000)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -69%
Stop Target: None
Action: If EMC can reach $20 by April we will have a double from our entry price. A ten contract was only $550 so we aren’t making a big deal with the percentage loss on this one. We knew going in that the market was either going higher or we would fall back when we entered the position 3 weeks ago.
Continue to hold.
Shuffle Master (SHFL, $8.85, down $0.07)
May 10 calls (SFQEB, $0.50, down $0.05) (SFQ100522C00010000)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -41%
Stop Target: 40 cents
Action: Continue to hold.
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, $59.28, down $0.65)
March 55 puts (OAQ100320P00055000, $1.60, up $0.10)
Action: Although we got some downside pressure on Monday with this stock we just don’t trust it and we don’t like the price action. We would have liked to have seen a run back to $64 before shares closed below $60 but we didn’t get that chance. We are dropping coverage today. For those of you who may have taken the trade, set stops at 70 cents and exits at $2.25+.
CBOE Volatility Index (^VIX, 26.51, up 0.40)
February 27.50 calls (VIXBY, $1.20, flat)
March 30 calls (VIXCF, $1.75, up $0.05)
Action: Some of you may have had trouble with the quotes and some brokerage houses have different ways of indentifying the VIX to trade. We added a carrot to this quote; some sites use slashes, and some use dashes. Because of the confusion, we are dropping coverage of this trade although some of you came out with decent returns off the lows.
Nasdaq PowerShares ETF (QQQQ, $42.67, down $0.31)
February 43 puts (QQQNQ, $0.86, up $0.07) (QQQ100220P00043000)
March 42 puts (QQQOP, $1.15, up $0.12) (QQQ100320P00042000)
Action: We should get a huge open but we expect any rally to fade. If we see an opportunity to add these puts during the rally we will send out a trade alert.
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