9:05am (EST)
Walt Disney (DIS, $29.84, up $0.36)
February 30 calls (DIS100220C000300000, $0.64, up $0.09)
Entry Price: $0.60 (2/9/10)
Exit Target: $1.00+
Return: 7%
Stop Target: None
Action: Two words we took away from Disney’s conference call…iPad and ESPN.
We were watching the action going into the close with this one and the bulls just could not push us through $30. In after-hours, the stock did get a pop up to $30.50 which is all we needed but only closed up 3 cents by 8pm.
The calls made it to a high of 75 cents yesterday and over 19,000 contracts traded which may have made the trade “crowded”. However, we listened to some of the meet-and-greet session with analysts and the earnings call was very upbeat.
This morning, shares are at $29.40 in pre-market trading. We are going to set a limit price to sell the options at 60 cents but we will probably have to close this one for a small loss. The options expire next Friday and the market is closed on Monday. The stock would have to get to $30.60 (technically) to break even and we don’t think Disney will have the legs to get us that far. This was only a one-day trade anyway and we didn’t plan on holding until next week anyway.
Although we didn’t get the bounce we had hoped for, Disney will be a solid investment for 2010 and should be at $35 or $40 by year-end.
Berkshire Hathaway Class B (BRK/B, $74.53, up $0.30)
June 100 calls (BPYFT, $0.40, up $0.10) (BPY100619C00100000)
Entry Price: $0.50 (2/1/10)
Exit Target: $1.00+
Return: -20%
Stop Target: None
September 100 calls (BPYIT, $0.60, up $0.15) (BPY100918C00100000)
Entry Price: $0.95 (2/1/10)
Exit Target: $2.00
Return: -37%
Stop Target: None
Action: We are going by the “ask” prices for the quotes and we are still looking for a pop in the stock by Friday.
EMC (EMC, $16.95, up $0.11)
April 19 calls (EMCDS, $0.16, down $0.01) (EMC100417C00019000)
Entry Price: $0.55 (1/19/10)
Exit Target: $1.00+
Return: -70%
Stop Target: None
Action: Continue to hold.
Shuffle Master (SHFL, $8.87, up $0.02)
May 10 calls (SFQEB, $0.60, up $0.05) (SFQ100522C00010000)
Entry Price: $0.85 (1/19/10)
Exit Target: $1.70+
Return: -29%
Stop Target: 40 cents
Action:
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, $43.11, up $0.44)
February 43 puts (QQQNQ, $0.62, down $0.24) (QQQ100220P00043000)
March 42 puts (QQQOP, $0.91, down $0.24) (QQQ100320P00042000)
Action: Next week has been a lousy option expiration week for the market in general over the last half dozen years. We still don’t buy the notion the bottom is going to fall out of this market but we will keep the March options on our Watch List. We are dropping the February puts because they expire next week but there may be a trade on the March puts over the next few days or next week.
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