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.
1:45pm (EST)
Rambus (RMBS, $10.08, down $0.27)
September 9 puts (RMBS110917P00009000, $0.65, up $0.15)
Entry Price: $0.55 (8/10/11)
Exit Target: $1.10+
Return: 18%
Stop Target: None
Action: Shares have traded to a low of $9.89 and we are looking for a drop below $8.
United Airlines (UAL, $17.18, down $1.28)
September 16 puts (UAL110917P00016000, $1.15, up $0.25)
Entry Price: $1.00 (8/10/11)
Exit Target: $2.00+
Return: 15%
Stop Target: None
Action: We are looking for shares of UAL to test $15 over the next few weeks.
Staples (SPLS, $12.42, down $0.79)
August 12 puts (SPLS110820P00012000, $0.65, up $0.20)
Entry Price: $0.50 (8/10/11)
Exit Target: $1.00+
Return: 30%
Stop Target: None
Action: Staples announces earnings next Tuesday and we believe they are going to report a terrible quarter. A drop below $10 could be in the cards.
PowerShares QQQ (QQQ, $51.67, down $1.36)
September 50 puts (QQQ110917P00050000, $1.80, up $0.60)
Entry Price: $1.55 (8/8/11)
Exit Target: $3.10
Return: 16%
Stop Target: $1.55
Action: Continue to 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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10:00am (EST)
Rambus (RMBS, $10.19, down $0.16)
Buy to OPEN September 9 puts (RMBS110917P00009000, $0.55, up $0.05)
Action: Use limit prices up to 55 cents but do not pay over 60-65 cents to establish positions.
United Airlines (UAL, $17.35, down $1.11)
Buy to OPEN September 16 puts (UAL110917P00016000, $1.00, up $0.10)
Action: Use limit prices up to $1.05-$1.10 to establish positions but do not pay over $1.15 to establish positions.
Staples (SPLS, $12.25, down $0.96)
Buy to OPEN August 12 puts (SPLS110820P00012000, $0.50, up $0.05)
Action: Use limit prices up to 55-60 cents.
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9:00am (EST)
PowerShares QQQ (QQQ, $53.03, up $2.44)
September 50 puts (QQQ110917P00050000, $1.20, down $1.40)
Entry Price: $1.55 (8/8/11)
Exit Target: $3.10
Return: -23%
Stop Target: $1.55
Action: We mentioned yesterday we could get whipsawed with this position but we wanted to leave it open as protection. The payoff will come if there is another steep selloff.
We also don’t need to rush out and buy call options either because we have plenty of ongoing trades that will rebound if strength holds.
Cigna (CI, $43.47, up $3.22)
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, other half stopped out at $3 on 8/9/2011)
Return: 205%
Stop Target: $3.00
Action: We thought shares would stay near $42 when we sent out our Trade Alert yesterday but like a rising tide that lifts all boats, shares surged higher by the bell. We did tell you to keep the $3.00 HARD STOP open going into the close and as you can see, the stop was hit so everyone should be out of the position. We closed half the trade at $3.50, half at $3.00, so the average closing cost was $3.25.
We would love to see a test back to $48, maybe $46, which is where we might enter the trade again.
Rambus (RMBS, $10.35, down $0.05)
August 12.50 puts (RMBS110820P00012500, $2.20, flat)
Entry Price: $0.15 (7/29/11)
Exit Target: $1.20+ (closed half at $1.70 on 8/5, half at $2.10 on 8/9/2011)
Return: 1,167%
Stop Target: None
Action: Rambus traded to a low of $9.78 shortly after our update. We mentioned rolling the trade over into some September puts and we like the 9’s (RMBS110917P00009000, $0.50, down $0.10) might be our flavor if we get back in Rambus.
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.
Rambus (RMBS, $10.35, down $0.05)
September 9 puts (RMBS110917P00009000, $0.50, down $0.10)
Thoughts: Watch for now but be ready for a Trade Alert if shares dip below $10 again.
United Airlines (UAL, $18.46, up $1.85)
August 17 puts (UAL110820P00017000, $0.40, down $0.90)
September 17 puts (UAL110917P00017000, $1.00, down $0.95)
Thoughts: Shares of UAL jumped 11% yesterday which may have offered a great entry point for these puts. The $19-$20 should serve as strong resistance and we are hoping for one more pop at the open so we can get into this position. There is a lot of open interest in both the August 17 puts (3,000) and the September 17 puts (14,000).
We will probably go with the September 17’s so be on the lookout for a Trade Alert if we pull the trigger this morning.
Sony (SNE, $22.61, up $0.94)
September 22 puts (SNE110917P00022000, $0.90, down $0.10)
Thoughts: The 52-week low is $21.59 for Sony but shares appear like they are heading below $20. If so, these options would double but the stock could touch $18 which gets these options to at least $4.
Staples (SPLS, $13.21, up $0.07)
August 13 puts (SPLS110820P00013000, $0.45, down $0.05)
September 12 puts (SPLS110917P00012000, $0.35, down $0.05)
Thoughts: We like the September puts as a way to play a drop to $10. Shares hit a 52-week low of $12.07 yesterday but rebounded with the rest of the market. The company also announces earnings next Tuesday and we think they will let the Street down.
Potash (POT, $52.44, up $3.13)
September 60 calls (POT110917C00060000, $0.70, up $0.35)
August 50 puts (POT110820P00050000, $1.20, down $1.80)
Thoughts: Watch for now.
Pepsi (PEP, $63.09, up $0.12)
October 67.50 calls (PEP111022C00067500, $0.80, down $0.20)
September 65 calls (PEP110917C00065000, $1.00, down $0.20)
Thoughts: Support is just above $60 and has held over the last few weeks. Watch for now.
Bank of America (BAC, $7.60, up $1.09)
September 7 puts (BAC110917P00007000, $0.70, down $0.70)
May (2012) 15 calls (BAC120519C00015000, $0.22, up $0.07)
Thoughts: This would have been a great strangle trade to have taken last Thursday and we would have exited the puts on Monday’s weakness. We want to take a chance on the May 15 calls as a lottery trade but we just don’t trust BAC right now.
General Electric (GE, $15.95, up $0.53)
September 16 calls (GE110917C00016000, $0.75, up $0.10)
Thoughts: Watch for now.
PNC Financial Services (PNC, $49.32, up $2.33)
September 55 calls (PNC110917C00055000, $0.65, down $0.45)
Thoughts: Tempting.
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