9:00am (EST)
JC Penney (JCP, $23.56, down $1.02)
November 22 puts (JCP121117P00022000, $1.10, up $0.25)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: 16%
Stop Target: None
Action: Shares traded to a low of $23.20 yesterday and closed just outside of our $23.50 target. The dip below support opened the door for a test back down to $22 and then $20.
First Solar (FSLR, $22.88, up $0.95)
October 20 puts (FSLR121020P00020000, $0.50, down $0.40)
Entry Price: $0.85 (9/28/12)
Exit Target: $1.70
Return: -41%
Stop Target: None
Action: Resistance is at $24 and shares traded up to $23.29 yesterday.
Tiffany & Co. (TIF, $62.08, up $0.58)
October 60 puts (TIF121020P00060000, $0.70, down $0.30)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.50
Return: -44%
Stop Target: None
Action: Shares reversed course yesterday after our midday update and traded higher by the close. We would like to see a drop below $60 this week which would get the 50-day MA in play. A move below this level could lead to double-nickels if $58 fails to hold.
Buffalo Wild Wings (BWLD, $85.25, down $0.91)
November 70 puts (BWLD121117P00070000, $1.20, up $0.15)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -4%
Stop Target: None
Action: We are looking for a drop down to $82 this week which should get $80 and the MA’s in play.
TiVo (TIVO, $10.52, up $0.07)
November 10 calls (TIVO121117C00010000, $0.85, up $0.05)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: 21%
Stop Target: None
Action: We got our close above $10.50 which should lead to a run at $11-$11.50.
KLA-Tencor (KLAC, $47.55, up $0.26)
October 45 puts (KLAC121020P00045000, $0.35, flat)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -36%
Stop Target: None
Action: Shares could test the low $40’s on a break below $46. Resistance is at $50. These options have less than 3 weeks before they expire so we need to see a continued breakdown this week.
Akamai Technologies (AKAM, $38.43, up $0.22)
October 40 calls (AKAM121020C00040000, $0.45, flat)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -50%
Stop Target: None
Action: Resistance has been a brick wall at $39 but if shares can clear $40, it’s off to the races. Yesterday’s high was $38.79.
Taiwan Semiconductor Manufacturing (TSM, $16.00, up $0.10)
October 15 calls (TSM121020C00015000, $1.05, up $0.10)
Entry Price: $0.45 (9/11/12)
Exit Target: $0.90 (closed HALF at 80 cents on 9/28/12)
Return: 106%
Stop Target: 70 cents (HARD STOP)
January 15 calls (TSM130119C00015000, $1.50, up $0.10)
Entry Price: $0.90 (9/11/12)
Exit Target: $1.80
Return: 67%
Stop Target: $1.00 (HARD STOP)
Action: We raised the stop targets on these calls yesterday and we are going to make them HARD STOPS to lock-in profits in case shares slip from here. We still see more strength ahead and the 52-week high is just up ahead at $16.15. Our year-end target is calling for a test to $20.
Solazyme (SZYM, $11.20, down $0.25)
December 12.50 calls (SZYM121222C00012500, $0.55, down $0.10)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -21%
Stop Target: 50 cents
Action: Shares traded to a low of $11.11 yesterday. Support has been strong at $11 and we are looking for a bounce off the lows by the end of the week.
Knight Capital Group(KCG, $2.71, down $0.01)
January 2.50 calls (2013) (KCG130119C00002500, $0.40, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -27%
Stop Target: 50 cents, lower to No Stop Target (None)
Action: We were up on this trade which is when we listed a stop target of 50 cents in September. We decided to stay in the trade when shares pulled back and since it was not a Hard Stop, everyone should still be in the trade. These options have until January before they expire and we only need them to trade to $3.20 to break even.
There is still risk down to $2 but shares may have bottomed after testing $2.34 last week. 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 year end.
Other 2012 Portfolio OPEN positions (4): 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 GroupOctober 24 puts (from August 2012)
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)
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.
Marriott International (MAR, $38.63, down $0.34)
October 37 puts (MAR121020P00037000, $0.55, up $0.05)
October 40 calls (MAR121020C00040000, $0.50, down $0.25)
Thoughts: Shares could test $35 on a negative earnings report or push $40 on better-than-expected numbers. This strangle trade should be profitable if shares move 5%-10% which we think they will. The breakeven points are $36 and $41, technically, by next Friday. If shares reach $35 or $42, the trade would more than double if you bought both options. For the risk takers, the fat kid is sitting on the seesaw and favors the puts.
We like the trade as a strangle option trade but would rather close a few more of our current trades before opening new positions.
LinkedIn (LNKD, $118.77, up $0.83)
November 95 puts (LNKD121117P00095000, $1.40, down $0.15)
Thoughts: We recommended LinkedIn puts back in April when shares were at trading just above $100. The options made 67% when shares fell to the mid-$90’s and we decided to get out.
American Express (AXP, $57.718, down $0.55)
November 60 calls (AXP121117C00060000, $0.50, down $0.20)
October 60 calls (AXP121020C00060000, $0.15, down $0.15)
Thoughts: This is our favorite Financial stock and the 52-week high is north of $60. We recommended AXP earlier this year when shares were challenging 52-week highs and the calls were up a whopping 475% in just over 2 weeks. The October calls are “cheap” out-of-the-money options that could double or triple if shares push $60 over the next few weeks but the November’s are the safer play if there is a pullback.
Caterpillar (CAT, $85.47, flat)
October 82.50 puts (CAT121020P00082500, $0.95, down $0.10)
November 80 puts (CAT121117P00080000, $1.70, down $0.10)
Thoughts: We might go with one of these put options if shares fall below $85.
Coinstar (CSTR, $44.99, up $0.54)
November 40 puts (CSTR121117P00040000, $1.50, down $0.05)
Thoughts: Resistance at $45 is trying to stick.
Ralph Lauren (RL, $153.83, up $2.07)
October 140 puts (RL121020P00140000, $0.50, down $0.20)
Thoughts: Shares could retest $140-$135 if $150 fails to hold..
Fossil (FOSL, $86.57, up $0.54)
October 75 puts (FOSL121020P00075000, $0.50, down $0.25)
December 55 puts (121222P00055000, $0.50, down $0.05)
Thoughts: We have a near-term target of $80 which would likely trip on a move back below $85 and a 6-12 month target of $40 if shares fall below $60.
Monster Beverage (MNST, $54.69, down $0.34)
November 50 puts (MNST121117P00050000, $1.70, dup $0.05)
October 52.50 puts (MNST121020P00052500, $1.00, flat)
Thoughts: We have a feeling shares are going to test $50 again and a break below this level should lead to a quick trip to $45. Resistance at $55 is trying to hold which was prior support.