9:10am (EST)
NEW TRADE!!!
Qualcomm (QCOM, $35.56, down $1.12)
Buy to OPEN April 37 call (AAO100417C00037000, $1.00, down $0.36)
Action: Qualcomm has gotten hammered after reporting earnings last week and there could be further downside risk to $34. However, after the bell last night the company announced a dividend increase as well as a $3 billion stock repurchase program.
Shares are already higher in pre-market to $36.75, up $1.19. There is a chance for a short-term trade and perhaps even a day trade on this one. The options should open around $1.25-$1.30 so set limit prices there. If we get the call options cheaper, great, but do not pay more than $1.40 for them.
If the options open HIGHER than $1.40, don’t take the trade.
Current Trades
FedEx (FDX, $85.81, up $1.05)
April 90 calls (FDX100417C00090000, $1.55, up $0.27)
Entry Price: $1.35 (3/1/10)
Exit Target: $2.70
Return: 15%
Stop Target: $1.00
Action: The calls traded to a high of $1.79 as shares touched $86.45 yesterday. We are seeing a bid of over $86 this morning. Continue to hold.
Cree (CREE, $69.71, up $1.88)
April 75 call (CQR100417C00075000, $1.80, up $0.45)
Entry Price: $1.25 (2/26/10)
Exit Target: $2.00
Return: 44%
Stop Target: $1.10
Action: Our original target was $1.75 but we bumped it up to $2.00 where we were trying to sell half the position and let the rest ride. If we do get to $2, follow this plan as we look to lock in some profits. The “ask” this morning is right at $70.
F5 Networks (FFIV, $58.30, up $2.50)
April 60 calls (FLK100417C00060000, $1.90, up $0.70)
Entry Price: $1.20 (2/22/10)
Exit Target: $2.20, raise to $2.50
Return: 58%
Stop Target: $1.25
Action: We are trying to close half of the trade at $2.20 yesterday and the calls traded to a high of $2.10. Let’s try to sell half near $2.50 because we are seeing an “ask” of over $60 in early action.
Berkshire Hathaway Class B (BRK/B, $81.91, up $1.78)
June 100 calls (BPY100619C00100000, $0.20, flat)
Entry Price: $0.50 (2/1/10)
Exit Target: $1.00+
Return: -60%
Stop Target: None
September 100 calls (BPY100918C00100000, $0.60, up $0.10)
Entry Price: $0.95 (2/1/10)
Exit Target: $2.00
Return: -37%
Stop Target: None
Action: Sweet rebound by the Baby Berks yesterday. Continue to hold.
Other 2010 Portfolio OPEN positions (2): These are trades that are still open in the portfolio that have longer expiration dates but are not worth mentioning until they turn around. This way you know we are still tracking them and we will record the results, accordingly. Click on the 2010 Portfolio link in the Members Area to view ALL open/ closed trades.
EMC (EMC, $17.75, up $0.26)
Shuffle Master (SHFL, $8.32, up $0.10)
Action: EMC is an April call option trade that is waking up again. Shuffle Master is a May option trade that we profiled in January 2010.
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert. These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions. We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.
Diamond Foods (DMND, $36.53, up $1.68)
March 35 calls (DQF100320C00035000, $1.85, up $0.75)
Action: Diamond Food fell $4, or 10%, last Friday after announcing an agreement to acquire Kettle Foods for $615 million. The company is scheduled to release earnings today but already announced their numbers along with the deal. The deal gets Diamond into the premium potato-chip market and they will do a good job in promoting the brand.
We did our research Sunday night and wanted to profile these options yesterday but the volume does not give us a good setup. There were only a handful of contracts that traded on Monday and the position is not liquid enough to get good fill prices. The current “bid” is $1.80, the “ask” is $2.10.
Sandisk (SNDK, $32.63, up $3.48)
March 30 calls (SWF100320C00030000, $3.00, up $2.25)
Action: Maybe we should have chased…
Standard & Poor Depositary Receipt (SPY, $111.89, up $1.15)
April 113 calls (SPY100417C00113000, $1.70, up $0.16)
Action: We closed this trade on Friday but some of you held over the weekend for bigger gains. We might come back to these but we are pretty full right now with other trades.
Diamonds Trust Series (DIA, $104.02, up $0.72)
March 105 calls (DIA100320C00105000, $0.78, up $0.12)
April 105 calls (DIA100417C00105000, $1.55, up $0.10)
Action: Continue to watch.
PowerShares Exchange Traded Fund (QQQQ, $45.41, up $0.65)
March 44 calls (QQQ100320C00044000, $1.47, up$0.22)
April 45 calls (QQQ100417C00045000, $1.20, up $0.15)
Action: The Q’s are showing more strength than the other indexes.
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