9:00am (EST)
Aflac (AFL, $48.05, up $0.14)
February 48 calls (AFL120218C00048000, $1.50, flat)
Entry Price: $0.75 (1/19/12)
Exit Target: $1.50 (closed half at $1.35 on 1/20/2012)
Return: 93%
Stop Target: $1.25 (HARD STOP)
Action: Shares traded up to $48.66 yesterday as the options traded up to $1.83. The low was $1.34 so our HARD STOP was not hit on the other half. We believe shares will run past $50, but if not, our stop will take us out of the trade automatically. Anything over $1.65 on the calls will be a triple for the trade.
Scientific Games (SGMS, $10.90, down $0.81)
February 12.50 calls (SGMS120218C00012500, $0.15, down $0.15)
Entry Price: $0.20 (1/18/12)
Exit Target: $0.40
Return: -25%
Stop Target: None
July 15 calls (SGMS120721C00015000, $0.35, down $0.15)
Entry Price: $0.35 (1/18/12)
Exit Target: $0.70
Return: 0%
Stop Target: None
Action: Shares took a hit yesterday after news spread that talks between Scientific Games and Playtech to form a joint venture together broke down.
Carrizo Oil & Gas (CRZO, $24.54, up $1.45)
April 30 calls (CRZO120421C00030000, $0.95, up $0.30)
Entry Price: $1.20 (1/17/12)
Exit Target: $2.40
Return: -21%
Stop Target: None
Action: Shares traded up to $25.50 at the open and we said we would like to see a run back above $24, then $26. We nearly got it yesterday.
Vivus (VVUS, $11.91, down $0.13)
February 14 calls (VVUS120218C00014000, $0.40, down $0.10)
Entry Price: $0.70 (1/12/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Continue to hold.
Westport Innovations (WPRT, $35.60, up $0.51)
April 40 calls (WPRT120421C00040000, $1.50, flat)
Entry Price: $1.30 (1/12/12)
Exit Target: $2.60 (closed half at $1.45 on 1/24/2012)
Return: 13%
Stop Target: $1.00
Action: We closed half of the trade yesterday after shares dipped into negative territory. We still feel a push past $40 is coming but if it doesn’t we will exit the trade for a small profit.
Coach (COH, $64.24, down $0.60)
February 55 puts (COH120218P00055000, $0.45, down $0.05)
Entry Price: $0.95 (1/11/12)
Exit Target: $1.50-$1.90
Return: -53%
Stop Target: None
Action: Coach traded down to $63.59 yesterday.
Solazyme (SZYM, $11.77, up $0.58)
March 15 calls (SZYM120317C00015000, $0.40, flat)
Entry Price: $0.45 (1/10/12)
Exit Target: $1.00
Return: -11%
Stop Target: None
Action: Solazyme kissed $11.88 yesterday but the options stayed flat. Continue to hold.
Microsoft (MSFT, $29.73, up $0.02)
July 30 calls (MSFT120721C00030000, $1.45, flat)
Entry Price: $0.75 (1/6/12)
Exit Target: $1.50+ (closed half at $1.35 on 1/24/2012)
Return: 87%
Stop Target: $1.00 (HARD STOP)
Action: We closed half of this trade yesterday after shares stalled at $29.95.
MGM Resorts (MGM, $13.14, up $0.50)
June 14 calls (MGM120616C00014000, $1.15, up $0.15)
Entry Price: $0.48 (1/6/12)
Exit Target: $1.00 (closed half at $1.00 on 1/18/2012)
Return: 124%
Stop Target: 80 cents (HARD STOP)
Action: Shares traded to a high of $13.24 on Monday and our near-term target is $15.
Newpark Resources (NR, $9.30, down $0.05)
March 10 calls (NR120317C00010000, $0.70, up $0.10)
Entry Price: $0.95 (1/3/12)
Exit Target: $1.90 (closed half at $1.20 on 1/10/2012)
Return: 0%
Stop Target: 50 cents
Action: The “ask” moved up a dime yesterday and we still like Newpark but we have been in this trade for over 3 weeks. Shares did make a new high recently but we need a run back over $10, soon, or we may close the trade for no gain.
Chesapeake Energy (CHK, $22.28, up $1.38)
April 25 calls (CHK120421C00025000, $0.70, up $0.15)
Entry Price: $1.25 (12/21/11)
Exit Target: $2.50
Return: -44%
Stop Target: 60 cents
Action: Shares surged over 6% and hit a high of $22.65 after the company said it would cut production of natty gas which is cheap as dirt. The suit-and-ties were calling for a drop to $1 for natural gas, now it could be headed to $3 which is good news for us. The company is the second largest producer of natty g and said it also will focus more of its efforts to produce oil. We tried to call a bottom in late December for the stock which is hard to do and why we went with the April call options. We also like the fact that $22 and $20 were super strong as support which bodes well for a run back towards $25.
Other 2012 Portfolio OPEN positions (1): 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 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
OCZ Technology Group February 9 calls (from January 2012) HOLD
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.
Petroleo Brasileiro (PBR, $31.10, up $1.28)
February 32 calls (PBR120218C00032000, $0.60, up $0.40)
April 34 calls (PBR120421C00034000, $0.66, up $0.32)
Thoughts: Shares of PBR surged over 4% yesterday on news of a new CEO. This is also a sweet Brazilian oil play and shares have been in a solid uptrend for a few weeks. The February 32’s opened at 18 cents and gained 200% yesterday while the April 34’s opened at 30 cents and more than doubled.
Abercrombie & Fitch (ANF, $44.23, down $0.28)
February 39 puts (ANF120218P00039000, $0.75, up $0.05)
May 30 puts (ANF120519P00030000, $0.55, up $0.10)
Thoughts: We have covered ANF for years and it appears ready for a breakdown. A drop below $42.50 could spell trouble down to the mid-$30’s. Earnings are due mid-February.
Nucor (NUE, $42.90, up $0.03)
February 44 calls (NUE120218C00044000, $0.60, down $0.05)
April 45 calls (NUE120421C00045000, $1.10, down $0.10)
Thoughts: We did a big write-up on Nucor on Sunday night and we really like this stock. We said if we could get the April calls for under a buck we may take a shot at them so stay locked-and-loaded.
American Capital (ACAS, $8.07, up $0.15)
February 8 calls (ACAS120218C00008000, $0.30, up $0.05)
Thoughts: Over 1,500 contracts traded in these options yesterday and American Capital is a current holding in our Weekly Wrap portfolio.
Seagate Technology (STX, $19.68, down $0.34)
February 21 calls (STX120218C00021000, $0.55, down $0.15)
March 21 calls (STX120317C00021000, $0.80, down $0.10)
Thoughts: Watch for now. Shares could make a run at $22 if $20 clears again.
Taiwan Semiconductor Manufacturing (TSM, $14.01, up $0.04)
April 15 calls (TSM120421C00015000, $0.25, down $0.05)
Thoughts: Watch for now. There are no call options in between 12.50 and 15 but they April 15’s will triple if the stock is at $16 come mid-April. This is a great risk/reward setup and we may take the bait if we can clear some room in the portfolio.
Potash (POT, $45.56, up $0.81)
February 47.50 calls (POT120218C00047500, $0.90, up $0.10)
March 50 calls (POT120317C00050000, $0.85, down $0.05)
Thoughts: The February calls opened at 79 cents and traded to a high of $1.14 while the March calls opened at 88 cents and hit $1.04. We are waiting for a close above $46 to possibly go long.
Pepsico (PEP, $66.10, down $0.18)
February 67.50 calls (PEP120218C00067500, $0.45, down $0.10)
April 70 calls (PEP120421C00070000), $0.35, down $0.05)
April 67.50 calls (PEP120421C00065000, $0.95, down $0.15)
Thoughts: We would like to see shares drop below $65 and come back down to $63.50. Yesterday’s low was $65.39 so stay tuned.
Philip Morris (PM, $74.86, up $0.34)
February 75 calls (PM120218C00075000, $1.25, up $0.05)
March 77.50 calls (PM120317C00077500, $0.75, flat)
Thoughts: Philip reached a peak of $75.10 yesterday and we are looking for a close above this level as confirmation for another push towards $80.
FedEx (FDX, $91.06, down $0.51)
February 95 calls (FDX120218C00095000, $0.65, down $0.30)
Thoughts: Watch for now.
Tempur Pedic International (TPX, $60.49, down $0.72)
February 65 calls (TPX120218C00065000, $2.20, down $0.30)
Thoughts: Earnings will be released today.
Freeport-McMoran Copper & Gold (FCX, $43.88, up $0.77)
February 45 calls (FCX120218C00045000, $1.05, up $0.10)
Thoughts: Watch for now.