Do not risk more than 5% of your trading account on any one trade but do try to take ALL of the trades. 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 a “Profit 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. Closed Trades for 2012 (131-43, or 75% win rate, including Weekly Wrap which is 24-0).
12:35pm (EST)
PowerShares QQQ (QQQ, $67.40, down $0.95)
November 66 puts (QQQ121117P00066000, $1.05, up $0.40)
Entry Price: $0.95 (10/9/12)
Exit Target: $1.90
Return: 11%
Stop Target: None
Action: We have a near-term target of $65 and a mid-November target of $63 for the QQQ’s.
Sina (SINA, $59.91, down $1.22)
November 50 puts (SINA121117P00050000, $1.10, up $0.20)
Entry Price: $1.00 (10/9/12)
Exit Target: $2.00
Return: 10%
Stop Target: None
Action: These options opened at 87 cents as shares tested a high of $61.78 but we wanted to make sure shares dropped below $60 before getting in. Our near-term target is for a test to double-nickels ($55).
Citrix Systems (CTXS, $69.28, down $1.32)
November 60 puts (CTXS121117P00060000, $1.15, up $0.10)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 10%
Stop Target: None
Action: We would like to see a close below $69.50 today. These are November options so we aren’t too worried about the short-term volatility shares may experience as the trend is lower.
JC Penney (JCP, $24.26, up $0.33)
November 22 puts (JCP121117P00022000, $0.80, down $0.10)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -16%
Stop Target: None
Action: We are looking for a close below $22 this week which should get $20 and the teens back in play. At $20 the trade is a double and at $19 we would hit a 200% return. Resistance is at $24-$25.
Buffalo Wild Wings (BWLD, $87.40, down $0.28)
November 70 puts (BWLD121117P00070000, $1.00, up $0.10)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -20%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100 and new 52-week highs. We would like to see shares close below $85 this week which should get $80 back in play. Earnings are due out on October 23.
TiVo (TIVO, $10.06, down $0.20)
November 10 calls (TIVO121117C00010000, $0.50, down $0.10)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -29%
Stop Target: None
Action: Support should hold at $10 on a pullback. We are looking for a close above $10.50 this week which has been short-term resistance. A move above this level should lead to a run at $11-$11.50.
KLA-Tencor (KLAC, $46.46, down $0.38)
October 45 puts (KLAC121020P00045000, $0.40, up $0.10)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -27%
Stop Target: None
Action: Resistance has held at $48 with risk to $50 and a break above this level will crush the premiums left in these puts. We would like to see a close below $46 this week and our breakeven point on the trade is $44.45. A break below $46 should lead to the low $40’s but we are running out of time as these options expire next Friday.
Akamai Technologies (AKAM, $38.37, down $1.23)
October 40 calls (AKAM121020C00040000, $0.45, down $0.30)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -50%
Stop Target: None
Action: We are looking for $38 to hold today but the pullback today is disappointing.
Solazyme (SZYM, $10.45, down $0.07)
December 12.50 calls (SZYM121222C00012500, $0.40, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Support could test $10 this week but we are looking for this level to hold. If not, we may exit the trade as a new trend would be in place.
Knight Capital Group (KCG, $2.50, down $0.05)
January 2.50 calls (2013) (KCG130119C00002500, $0.30, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -45%
Stop Target: None
Action: There is still risk down to $2. Shares were near $2.80 when we entered this trade back in August after tumbling from $10 to $2.50 in late July on the company’s trading fiasco. We think a buyout offer north of $5 could be in the cards by yearend.
Other 2012 Portfolio OPEN positions (5): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and 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 if the options expire. Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Apollo Group October 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012)
Bank of America January 12.50 calls (2013) (from March 2012)
eBay October 52.50 calls (from September 2012)
Tiffany & Co. October 60 puts (from September 2012)
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 but these are the trades we are watching as new candidates.
We will update this section in the morning.
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11:05am (EST)
NEW TRADES!!!
PowerShares QQQ (QQQ, $67.27, down $1.08)
Buy to OPEN November 66 puts (QQQ121117P00066000, $0.95, up $0.30)
Action: Use limit orders up to $1.00-$1.05 but do not pay over $1.10-$1.15 to establish positions.
Sina (SINA, $59.97, down $1.16)
Buy to OPEN November 50 puts (SINA121117P00050000, $1.00, up $0.10)
Action: Use limit orders up to $1.05-$1.10 but do not pay over $1.15-$1.20 to establish positions.
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9:00am (EST)
Citrix Systems (CTXS, $70.60, down $0.97)
November 60 puts (CTXS121117P00060000, $1.05, up $0.15)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 0%
Stop Target: None
Action: We were looking for a close below $70 after shares traded to a low of $69.46 and there is risk back to $72-$74. These are November options so we aren’t too worried about the short-term volatility shares may experience as the trend is lower.
JC Penney (JCP, $23.93, down $0.03)
November 22 puts (JCP121117P00022000, $0.90, flat)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -5%
Stop Target: None
Action: Shares kissed a low of $23.68 before finishing slightly lower. We are looking for a close below $22 this week which should get $20 and the teens back in play. At $20 the trade is a double and at $19 we would hit a 200% return.
Buffalo Wild Wings (BWLD, $87.68, up $0.66)
November 70 puts (BWLD121117P00070000, $0.90, down $0.05)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -28%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100 and new 52-week highs. Yesterday’s peak was $88.04. We would like to see shares close below $85 this week which should get $80 back in play. Earnings are due out on October 23.
TiVo (TIVO, $10.26, down $0.05)
November 10 calls (TIVO121117C00010000, $0.60, down $0.10)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -14%
Stop Target: None
Action: We are looking for a close above $10.50 this week which has been short-term resistance. A move above this level should lead to a run at $11-$11.50. Support should hold at $10 on a pullback.
KLA-Tencor (KLAC, $46.84, down $0.28)
October 45 puts (KLAC121020P00045000, $0.30, flat)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -45%
Stop Target: None
Action: Resistance has held at $48 with risk to $50 and a break above this level will crush the premiums left in these puts. We would like to see a close below $46 this week and our breakeven point on the trade is $44.45. A break below $46 should lead to the low $40’s but we are running out of time as these options expire next Friday.
Akamai Technologies (AKAM, $39.60, up $0.19)
October 40 calls (AKAM121020C00040000, $0.75, up $0.10)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -17%
Stop Target: None
Action: Akamai finally cleared $40 and made another 52-week high of $40.32 as the calls reached $1.09. We would like to see a close above $40 today as it could lead to a quick trip to $42. This would make the options worth $2 but we may take half profits on another pop above $40.
Solazyme (SZYM, $10.52, down $0.44)
December 12.50 calls (SZYM121222C00012500, $0.40, down $0.10)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Support could test $10 this week but we are looking for this level to hold. If not, we may exit the trade as a new trend would be in place.
Knight Capital Group (KCG, $2.55, down $0.03)
January 2.50 calls (2013) (KCG130119C00002500, $0.30, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -45%
Stop Target: None
Action: There is still risk down to $2. Shares were near $2.80 when we entered this trade back in August after tumbling from $10 to $2.50 in late July on the company’s trading fiasco. We think a buyout offer north of $5 could be in the cards by yearend.
Other 2012 Portfolio OPEN positions (5): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and 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 if the options expire. Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Apollo Group October 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012)
Bank of America January 12.50 calls (2013) (from March 2012)
eBay October 52.50 calls (from September 2012)
Tiffany & Co. October 60 puts (from September 2012)
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 but these are the trades we are watching as new candidates.
Morgan Stanley (MS, $17.45, down $0.05)
November 18 calls (MS121117C00018000, $0.60, down $0.05)
Thoughts: There are a couple of earnings from the Financial sector that will hit Wall Street on Friday. Instead of playing JPMorgan or Wells, we may play Morgan Stanley for a run to $20 by mid-November.
Valero Energy (VLO, $31.71, down $0.18)
November 34 calls (VLO121117C00034000, $0.65, down $0.05)
November 31 puts (VLO121117P00031000, $1.25, up $0.05)
Thoughts: A move above $34 could lead to a run at $40 while a drop below $31 would be bearish.
LinkedIn (LNKD, $117.97, down $0.86)
November 95 puts (LNKD121117P00095000, $1.20, flat)
Thoughts: Resistance has been tight at $122.50 and a break above $125 would be bullish. We may use these put options on a move below $115.
Taiwan Semiconductor Manufacturing (TSM, $15.53, down $0.54)
January 15 calls (TSM130119C00015000, $1.50, down $0.10)
November 15 calls (TSM121117C00015000, $0.85, down $0.40)
Thoughts: There is risk down to $15 and we would wait for a move back above $16 before considering these options.
First Solar (FSLR, $20.26, up $0.19)
November 18 puts (FSLR121117P00018000, $1.35, down $0.10)
October 30 puts (FSLR121020P00020000, $1.05, down $0.20)
Thoughts: We were whipsawed out of this position yesterday for a 33% gain but the pop to $21 faded. We would confirm move below $20 before using these puts.
Sina (SINA, $61.13, down $0.40)
November 55 puts (SINA121117P00055000, $2.00, up $ 0.10)
Thoughts: Resistance is at $65 but shares could test $45 if $55 doesn’t hold on a break below $60.
American Express (AXP, $58.82, up $0.26)
November 60 calls (AXP121117C00060000, $0.95, up $0.10)
October 60 calls (AXP121020C00060000, $0.40, up $0.05)
Thoughts: Shares could make a run past $60 if the Financial stocks show strength.