9:00am (EST)
Aflac (AFL, $49.07, up $1.02)
February 48 calls (AFL120218C00048000, $2.05, up $0.55)
Entry Price: $0.75 (1/19/12)
Exit Target: $1.50 (closed half at $1.35 on 1/20/2012)
Return: 127%
Stop Target: $1.40 (HARD STOP)
Action: We continue to think shares will break $50 but we are raising our Hard Stop to $1.40 as we want to lock-in this triple-digit gain. If Aflac breaks $50 we will adjust the stop accordingly.
Scientific Games (SGMS, $11.45, up $0.55)
February 12.50 calls (SGMS120218C00012500, $0.25, up $0.10)
Entry Price: $0.20 (1/18/12)
Exit Target: $0.40
Return: 25%
Stop Target: None
July 15 calls (SGMS120721C00015000, $0.50, up $0.15)
Entry Price: $0.35 (1/18/12)
Exit Target: $0.70
Return: 43%
Stop Target: None
Action: Nice comeback by Scientific yesterday as shares added 5%. We have talked about their pending deal with Greece to run their lottery and the 52-week high is $12.06 which was set last Thursday. Continue to hold.
Carrizo Oil & Gas (CRZO, $24.88, up $0.30)
April 30 calls (CRZO120421C00030000, $1.00, up $0.05)
Entry Price: $1.20 (1/17/12)
Exit Target: $2.40
Return: -17%
Stop Target: None
Action: Shares traded to a high of $25.07 yesterday and we are looking for a close above $26 this week.
Vivus (VVUS, $11.86, down $0.05)
February 14 calls (VVUS120218C00014000, $0.40, flat)
Entry Price: $0.70 (1/12/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Vivus expects to hear word from an advisory panel on Qnexa in mid-February which could give us clues on if the FDA’s will approve the obesity drug or not. A decision is expected by mid-April but we are hoping to hear good news before then.
Westport Innovations (WPRT, $38.06, up $2.46)
April 40 calls (WPRT120421C00040000, $2.45, up $0.95)
Entry Price: $1.30 (1/12/12)
Exit Target: $2.60 (closed half at $1.45 on 1/24/2012)
Return: 42%
Stop Target: $1.00, raise to $1.75 (HARD STOP)
Action: Shares of Westport traded up to $38.13 yesterday and went out near their high. The options zoomed over 60% on the move which has given us a nice double-digit profit. We have raised the Stop Target to $1.50 and have made it a Hard Stop for the other half.
Solazyme (SZYM, $11.80, up $0.03)
March 15 calls (SZYM120317C00015000, $0.40, flat)
Entry Price: $0.45 (1/10/12)
Exit Target: $1.00
Return: -11%
Stop Target: None
Action: Shares traded up to $11.90 yesterday and we would like to see a close above $12 this week. Shares have not traded above this level since the beginning of the year and a close above $12 should give the trade some momentum.
Microsoft (MSFT, $29.34, down $0.39)
July 30 calls (MSFT120721C00030000, $1.25, down $0.20)
Entry Price: $0.75 (1/6/12)
Exit Target: $1.50+ (closed half at $1.35 on 1/24/2012)
Return: 80%
Stop Target: $1.10 (HARD STOP)
Action: Shares traded down to $29.18 but are Hard Stop was not hit on the other half of the trade. We raised the Hard Stop to $1.10 yesterday and the calls traded down to $1.17.
MGM Resorts (MGM, $13.16, up $0.02)
June 14 calls (MGM120616C00014000, $1.15, flat)
Entry Price: $0.48 (1/6/12)
Exit Target: $1.00 (closed half at $1.00 on 1/18/2012)
Return: 124%
Stop Target: $1.05 (HARD STOP)
Action: We raised the Hard Stop to $1.05 following the dip to $12.76 on yesterday’s open. The previous hard stop was 80 cents and shares had rebounded back above $13 when we raised the hard stop yesterday so we are still in the other half of the trade. We are still looking for shares to make a run to $15 but we could be stopped out at any time if shares fall back below $13 again. If the hard stop is hit, we lock-in a 100+% return no matter what.
Newpark Resources (NR, $9.42, up $0.12)
March 10 calls (NR120317C00010000, $0.70, flat)
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: We would love to see a close above $10 this week. The 52-week high is $10.62 which was set 2 weeks ago.
Chesapeake Energy (CHK, $22.49, up $0.21)
April 25 calls (CHK120421C00025000, $0.80, up $0.10)
Entry Price: $1.25 (12/21/11)
Exit Target: $2.50
Return: -36%
Stop Target: 60 cents
Action: Shares reached a peak of $22.54 on Tuesday and closed near their high after trading down to $21.73. Support has been solid at $22 but we need a close above $24 to get the momentum going in this trade.
Other 2012 Portfolio OPEN positions (2): 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 – shares were up 8% yesterday.
Coach February 55 puts (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, $31.55, up $0.45)
February 32 calls (PBR120218C00032000, $0.80, up $0.20)
April 34 calls (PBR120421C00034000, $0.80, up $0.14)
Thoughts: If you are in this trade from Monday, you may want to lock-in half profits. The February 32’s opened at 18 cents on Monday while the April 34’s opened at 30 cents and both are showing phenomenal triple-digit profits.
Abercrombie & Fitch (ANF, $45.67, up $1.44)
February 39 puts (ANF120218P00039000, $0.45, down $0.30)
May 30 puts (ANF120519P00030000, $0.40, down $0.15)
Thoughts: It seems Coach helped shares of ANF rebound which is good for us as it tested resistance. 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 so be patient. Earnings are due mid-February.
Nucor (NUE, $43.20, up $0.30)
February 44 calls (NUE120218C00044000, $0.65, up $0.05)
April 45 calls (NUE120421C00045000, $1.20, up $0.10)
Thoughts: Shares dipped to a low of $42.24 at the start of trading yesterday and we wanted to pull the trigger on the April 45 calls. They opened at $1.10 and came down to $1.06 but we were trying to get them for under $1. We may still try to get in the trade because Nucor could be headed to $50.
American Capital (ACAS, $8.07, flat)
February 8 calls (ACAS120218C00008000, $0.30, flat)
Thoughts: Continue to Watch.
Seagate Technology (STX, $19.75, up $0.07)
February 21 calls (STX120218C00021000, $0.55, flat)
March 21 calls (STX120317C00021000, $0.80, flat)
Thoughts: Watch for now. Shares could make a run at $22 if $20 clears again.
Taiwan Semiconductor Manufacturing (TSM, $13.93, down $0.08)
April 15 calls (TSM120421C00015000, $0.20, down $0.05)
Thoughts: Watch for now. There are no call options in between 12.50 and 15 but the April 15’s will quadruple 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, $44.43, down $1.13)
February 47.50 calls (POT120218C00047500, $0.55, down $0.35)
March 50 calls (POT120317C00050000, $0.60, down $0.25)
Thoughts: Potash was hit with a downgrade yesterday but we think shares are still headed to $50 on a break above $46.
Pepsico (PEP, $66.20, up $0.10)
February 67.50 calls (PEP120218C00067500, $0.45, flat)
April 70 calls (PEP120421C00070000), $0.35, flat)
April 67.50 calls (PEP120421C00065000, $0.95, flat)
Thoughts: We would like to see shares drop below $65 and come back down to $63.50 but we may not get that opportunity.
Philip Morris (PM, $74.15, down $0.71)
February 75 calls (PM120218C00075000, $0.90, down $0.35)
March 77.50 calls (PM120317C00077500, $0.50, down $0.25)
Thoughts: Continue to watch. We could be getting close to a nice entry levels.
FedEx (FDX, $90.79, down $0.27)
February 95 calls (FDX120218C00095000, $0.55, down $0.10)
Thoughts: The options look tempting and would double if shares are at $96 by mid-February.
Tempur Pedic International (TPX, $62.25, up $1.76))
February 65 calls (TPX120218C00065000, $2.60, up $0.40)
Thoughts: This was another earnings trade we were considering but stayed on the sidelines because the premium was a little high. The company reported record results for the quarter.
Freeport-McMoran Copper & Gold (FCX, $43.97, up $0.09)
February 45 calls (FCX120218C00045000, $1.05, flat)
Thoughts: Watch for now.