Option Investor
Newsletter

Daily Newsletter, Tuesday, 9/4/2012

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Thank You Bill Gross?

by Jim Brown

Click here to email Jim Brown

The Dow hit -113 at its lows before Bill Gross tweeted about the Draghi bond buying plan and short were forced to cover. Was that the real reason?

Market Statistics

The morning started off bad after the economics showed a worsening situation in the USA. The Dow declined -113 to 12,977 and pierce the 13,000 support level. After battling back above 13,000 two hours later it moved sideways at about -85 points until 2:PM. The market reporters gave Bill Gross the credit for the rebound when he said, "Draghi appears willing to write 2-3 year checks to peripherals. Very reflationary. Buy gold, TIPS, real assets." By peripherals he meant Spain, Italy, etc.

Unfortunately Bill's tweet did not come out until 2:30 not 2:00. The market was already in rally mode well before he made that tweet. This appears to be a case of reporters trying to match the news to the tape and not doing a very good job. The Russell 2000 started rallying at 12:30 and kicked into high gear at 2:00 and that breakout was probably the result of a buy program. Around 2:PM is a time when we normally see buy programs kick in and the uptick in the Dow, S&P and Russell was exactly at 2:05 across all indexes. News related spikes don't occur on the dot with such velocity.

Lastly, the Russell 2000 gained +10 points for the day, a rebound of +15 from the low. The Dow and S&P closed negative. It sure looks to me like a Russell buy program was responsible for the market rebound.

RUT Chart

The morning economics were led by the ISM Manufacturing for August. The headline number came in at 49.6, a decline from 49.8 in July. This was well below consensus estimates for a rise to 50.9. This is the third month in contraction territory and at that level it suggests the economy is very close to a recession. Normally a decline to 45.0 means the economy is in a recession.

The internal components were also weak. The New orders component declined again to 47.1 from 48.0 and the third month in contraction territory. The back orders component declined to 42.5 from 43.0 and the fifth month in contraction territory. Production declined to 47.2 and the first month in contraction after posting a cycle high at 61.0 in April.

The last time the headline number was under 50 for three months was early 2009 when the economy was emerging from the recession. The prices paid component rocketed higher from 39.5 to 54 suggesting the rise in commodity prices was exploding through the manufacturing sector. This means the cost of products to the consumer will be going up.

This is not a good report with the headline number the lowest level since July 2009.

ISM Chart

Construction spending for July fell -0.9% compared to estimates for a gain of +0.5%. This compares to the June reading with a +0.4% gain. This was the biggest drop since July of 2011. Private construction declined -1.2% and private residential construction fell by -1.6%. Public residential construction fell -1.1% and is now down -19.4% year over year.

This was a negative report but this is lagging data for July and investors don't pay much attention to the month to month news and focus on the longer term trend and that is turning negative.

Moody's Construction Spending Chart

The good news of the day came from the vehicle sales report for August. Sales rose to an annualized rate of 14.5 million compared to the 14.1 million in July. Analysts were expecting only a minor gain to 14.2 million. At 14.5 million that is the highest level since the recovery began although we did see that same level in February before fading slightly in the spring. At the 14.5 million pace sales are now +16.5% higher than the same period in 2011. However, a lot of that is tsunami related because Japanese brands were not available in the USA.

Analysts believe the improvement in the housing market is helping with truck sales. However, sales of cars increased to 7.37 million from 7.12 million. Truck sales rose from 6.95 million to 7.13 million.

The average age of a vehicle in the USA is now 11 years and that will continue to push sales higher as those cars begin to self destruct and wear out. High fuel prices are also pushing consumers to purchase new cars with higher economy standards. Analysts are expecting sales to rise to 15.7 million in 2013 assuming the country does not fall back into a recession.

Moody's Vehicle Sales Chart

The economic calendar for tomorrow is really overshadowed by the product announcements for new phones. Microsoft, Nokia, Motorola and Verizon are all trying to get their news out a week ahead of Apple's iPhone 5 debut on the 12th.

Thursday is the big day for the ECB and expectations are huge that they will announce a bond buying program of up to 3 years for those countries that request rate assistance. The details of the discussions have been leaked but there has not been any timeline. The ECB is not likely to announce its program other than to say it is considering some rate assistance because they don't want to put the German vote on the ESM on the 12th in jeopardy. Several analysts believe the ECB will cut rates but that is all they will do on Thursday. That would be very frustrating for investors that have already built up their hopes for a big QE announcement.

The ADP Employment will be a preview of the Nonfarm Payrolls on Friday and a material decline there could be a disappointment as well.

The Nonfarm payroll estimates for Friday are slipping. Officially they are still looking for a gain of +128,000 jobs but I am now seeing whisper numbers in the +75,000 range. That would guarantee FOMC action at the meeting next week.

Economic Calendar

Also depressing the markets at the open was a drop in China's August PMI to 49.2 from 50.1 in July. That was the first decline in nine months for the PMI. This was below the estimates of 24 economists. The HSBC and Markit Economics PMI fell to 47.6 from the initial reading of 47.8 on August 23rd. Any number below 50 represents economic contraction.

Oil prices declined by just over a dollar because China is the second largest user of crude oil. A continued slowdown in China would weaken demand. Crude closed at $95.34. The EIA inventory report will be delayed until Thursday by the holiday.

The dollar rose slightly but gold and silver bucked the trend and moved higher as well. Gold briefly traded over $1701 for the first time since March 13th on the prospect of QE from the ECB and Fed. Silver traded up to $32.47.

WTI Crude Chart

Silver Chart

Gold Chart

In stock news NetFlix (NFLX) declined -6% after Amazon (AMZN) signed a deal with Epix for downloadable content. Netflix had an exclusive deal with Epix that recently expired and Amazon was quick to jump into the fray. The Epix catalog has movies from Viacom, Lions Gate (think Hunger Games), MGM and access to Marvel/Disney movies through a Viacom link.

Last Friday Amazon partnered with Comcast/NBC to bring scores of popular TV series to the Amazon Prime platform. Amazon will announce its newest Kindle Fire on Thursday and all of these content deals will only enhance the Amazon content library.

NetFlix Chart

Caterpillar (CAT) fell -3% on weakness in demand in China and Asia as well as home in the USA. The weak construction spending report and the falling economic numbers in China caused investors to bail even though there was no news directly from CAT. The company was the biggest loser in the Dow.

Caterpillar Chart

After the close today FedEx (FDX) warned on earnings for the current quarter and shares fell -$3 in late trading. The company blamed weak shipments in Asia and Europe as well as "constrained" revenue growth in the FedEx Express division. The company now expects to earn $1.37 to $1.43 compared to prior forecasts of $1.45 to $1.60. Analysts were expecting $1.56 per share. Shares fell to below $84 from a $87.54 close but rebounded to $85.05 in after hours.

FedEx Chart

Facebook (FB) shares hit a new low today at $17.55 but rebounded after the close to $18.08 after Zuckerberg said he would not sell any of his shares for a year. In an SEC filing he said he has no plans to sell for at least 12 months. He did sell 30.2 million shares in the IPO for $1.1 billion so he is not hurting for spending money.

The really big news is that Facebook is waving the lockup periods on employee owned stock. Many were locked up until Nov 14th. While that sound like big news there is a catch and the waived period is not much better. Any employee still working at Facebook through Oct 15th is free to sell their shares on October 29th. That is six days after the October 23rd earnings report. So basically it is a big press release but employees only gain 15 days from the original Nov 14th lockup.

The move comes one day after Andrew Ross Sorkin blasted Facebook officers in the New York Times over the IPO debacle. Read it here

Sorkin attempted to lay blame for the botched IPO and David Ebersman, FB CFO, took a lot of the heat.

Facebook is also executing what would amount to a buyback of 101 million shares by issuing 124 million existing shares to holders of pre-2011 RSU (restricted stock units) and will then withhold 101 million shares to settle tax requirements. Those shares will no longer be "considered outstanding and therefore will reduce the share count." Considering there are 1.5 billion locked up shares coming to market before year end that 101 million is chump change.

Facebook Chart

As I mentioned earlier today's rally was brought to you by the Russell 2000. The small cap index rebounded +15 points to post a +10 point gain and close over critical resistance at 820. Ordinarily this would be a big deal. The fact it came after a large buy program makes it less of a deal but still positive for market sentiment.

The Russell 2000 is the sentiment indicator for fund managers. Since the majority of hedge funds are having a bad year with gains in the low single digits they are tuned into market sentiment in hopes of launching some winning positions before year end.

The fact the Russell was seeing decent buying on the morning dip even before the buy program hit is market positive. I like the close over 822 even though it was short covering at the close. It all counts. The key now will be how well the Russell behaves the rest of the week. If it can hold those gains then we are good to go for a resistance test at 832 and what could be a difficult level.

However, the Dow lost -55 points and the S&P closed down -2. Futures are down -2.50 after the FDX warning. That warning is probably only the first of many in the blue chip space. Earnings estimates are declining daily so that was a shot across the bow warning. If the Russell can survive the shock then the market should move higher.

Obviously that theory will be tested severely by the ECB, Payrolls and Fed over the next seven trading days.

Russell 2000 Chart

The S&P spent most of the day under 1400 with a low of 1396. That is a new lower low. Since we did not close there it has less meaning but it is still a warning signal. The afternoon rebound took it back to 1409 but there were plenty of sell on close orders. That is the third test of 1400 in the last three weeks with the prior test on Thursday.

This is really starting to worry me along with the Dow's constant battle at 13,000. I believe it is simply investors who bought in anticipation of some QE announcements getting cold feet since the market has gone sideways for the last month.

S&P Chart - 90 Min

S& Chart - Daily

The Dow has moved down to a new range. Once the 13,100 support level broke it became resistance and it was solid today. The intraday low at 12,977 was a lower low and the high at 13,092 a lower high. This pressure will be resolved one way or another probably on Thursday. My guess would be to the downside if the ECB does not announce any actual bond buying and tries to kick the can past the German ESM vote on the 12th.

The big problem for the market would be a material decline below Dow 13,000. This could setup a couple days of profit taking without any material stimulus news.

Dow Chart - Daily

The Nasdaq Composite posted a +8 point gain but the Nasdaq 100 was fractionally negative. Apple gained +10 but Google lost -5. Apple finally made the official announcement about the Sept 12th product presentation and that helped fuel gains in the Apple suppliers and supported the composite index. The declines in Google, NetFlix and Priceline helped hold the Nasdaq 100 underwater.

The Nasdaq Composite is still stuck in the 3050-3085 range with the low for the day at 3040.24 and high 3082. You can get much more range bound than that with both extremes tested.

Nasdaq Chart - Daily

I could write ten more pages but the bottom line would be the same. The market is just passing time until the ECB meeting on Thursday and Nonfarm Payrolls on Friday. Those two events are the keys to how we close the week. Other than the Russell buying earlier in the day the market gains were strictly buy program related. Somebody may have been trying to make up for lost time now that August is over or it could have been the Fed trying to keep the market supported until the ECB/FOMC meetings and QE is announced. We know from his comments that Bernanke believes keeping the stock market rising is the key to the wealth effect and increasing consumption in the economy.

If you are not already in the market I would probably be looking for the ECB to disappoint. The unknown factor is whether the market will turn that disappointment into another brick in the wall of worry or the straw that breaks the market's back.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email


New Option Plays

Priced In!

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:

(bullish ideas) GTLS, IWM, WPI, AYI, FMX, SNI, ADS, UA,

(bearish ideas) SBUX, HP, DE


NEW DIRECTIONAL PUT PLAYS

Mosaic Company - MOS - close: 56.75 change: -1.16

Stop Loss: 58.55
Target(s): 50.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
America is currently experiencing its worst drought in more than 50 years. Yet it looks like the farmer's demand for fertilizer has already been priced into shares of MOS. The stock failed at resistance near $60.00 and now it's reversing lower.

I am suggesting a trigger to buy puts at $56.30. Our target is $50.50.

NOTE: With less than three weeks left on the September puts, I see them as the higher-risk but higher-reward trade. I prefer the Octobers.

Trigger @ 56.30

- Suggested Positions -

buy the Sep $55 PUT (MOS1222u55) current ask $0.72

- or -

buy the Oct $55 PUT (MOS1220v55) current ask $1.78

Annotated Chart:

Entry on September xx at $ xx.xx
Average Daily Volume = 2.9 million
Listed on September 04, 2012



In Play Updates and Reviews

Nice Intraday Bounce

by James Brown

Click here to email James Brown

Editor's Note:

Equities produced a nice intraday bounce but the S&P 500 failed to break the two-week trend line of lower highs.

I am suggesting we exit our WFM trade at the open tomorrow.

CRI and PTR were triggered. DRQ was stopped out.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 84.33 change: +0.41

Stop Loss: 82.40
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -28.1% & Oct85c: - 5.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/12: AMGN managed a decent bounce (+0.4%) that outperformed the major indices and the biotech sector index. I don't see any changes from my weekend comments.

- Suggested Positions -

Long Sep $85 call (AMGN1222i85) Entry $1.35

- or -

Long Oct $85 call (AMGN1220j85) Entry $2.15

09/01/12 new stop loss @ 82.40
08/27/12 new stop loss @ 81.95
08/15/12 triggered at $83.75

Entry on August 15 at $83.75
Average Daily Volume = 4.8 million
Listed on August 14, 2012


BRCM - Broadcom - close: 35.34 change: -0.19

Stop Loss: 34.40
Target(s): 38.50
Current Option Gain/Loss: + 0.5%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
09/04/12: I am growing impatient with BRCM's lack of progress. Shares almost hit our stop loss today with a dip to $34.65 before bouncing. You would think that given all the excitement over AAPL's upcoming iPhone 5 launch that BRCM would show more strength. More conservative traders may want to exit early now.

I am not suggesting new positions at this time.

- Suggested Positions -

Position: Nov $36.00 Call (BRCM1217K36) entry $1.80

08/18/12 new stop loss @ 34.40
08/08/12 new stop loss @ 33.25
no follow through, turning cautious
08/07/12 triggered @ $34.75
08/06/12 adjust stop loss to $32.45

Entry on August 07 at $34.75
Average Daily Volume = 10 million
Earnings Oct-23rd
Listed on Aug 4, 2012


Celgene Corp. - CELG - close: 72.07 change: +0.03

Stop Loss: 70.45
Target(s): 77.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
09/04/12: CELG rebounded off its morning lows but did not quite breakout past recent resistance. We're still waiting for a move to $72.75.

I am suggesting a trigger to buy calls at $72.75 with a stop loss at $70.45.

Trigger @ 72.75

- Suggested Positions -

buy the Sep $75 call (CELG1221i75)

- or -

buy the Oct $75 call (CELG1220j75)

Entry on August xx at $ xx.xx
Average Daily Volume = 2.9 million
Listed on August 25, 2012


Concur Technologies - CNQR - close: 73.34 change: +0.94

Stop Loss: 71.25
Target(s): 74.75 (Sept calls), $77.50 (Nov calls)
Current Option Gain/Loss: Sep75c: +12.0% & Nov75c: +22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/12: CNQR is showing some relative strength with a +1.3% gain. Please note I am making some changes to our trade tonight. We will plan on exiting our September $75 calls at $74.75 but I am raising the exit target on our November calls to $77.50. We will adjust our stop loss to $71.25.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $75 call (CNQR1222i75) Entry $1.25

- or -

Long Nov $75 call (CNQR1217j75) Entry $3.60

09/04/12 adjust exit target for Sept. calls to $74.75
adjust exit target for Nov. calls to $77.50
+ new stop loss @ 71.25
08/21/12 new stop loss @ 69.75
08/16/12 new stop loss @ 68.75
08/15/12 triggered at $70.25

Entry on August 15 at $70.25
Average Daily Volume = 577 thousand
Listed on August 13, 2012


Carter's Inc. - CRI - close: 56.50 change: +0.79

Stop Loss: 54.65
Target(s): 59.85
Current Option Gain/Loss: - 4.3%
Time Frame: 3 weeks
New Positions: see below

Comments:
09/04/12: CRI continues to show strength with a bullish breakout past $56.00. Our trigger to buy calls was hit at $56.25.

FYI: There are less than three weeks left on the September options. Octobers are available but the spreads are too wide.

- Suggested Positions -

Long Sep $55 call (CRI1222i55) Entry $2.30

09/04/12 triggered @ 56.25

Entry on September 04 at $56.25
Average Daily Volume = 441 thousand
Listed on September 01, 2012


Express Scripts - ESRX - close: 63.06 change: +0.44

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Sep62.5c: +55.7% & Oct$62.5c: +39.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/12: ESRX just closed at a new high with today's +0.69% gain. Readers may want to start inching up their stop loss. If you were waiting for a breakout to buy calls then this is it.

FYI: The Point & Figure chart for ESRX is bullish with a $76 target.

- Suggested Positions -

Long Sep $62.50 call (ESRX1222i62.5) Entry $0.95

- or -

Long Oct $62.50 call (ESRX1220j62.5) Entry $1.67

Entry on August 24 at $61.31
Average Daily Volume = 5.1 million
Listed on August 23, 2012


Whole Foods Market, Inc. - WFM - close: 96.63 change: -0.12

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: Sep$100c: -48.2% & Oct$100c: -24.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/12: The larger trend for WFM is bullish but short-term the stock is not seeing any improvement. Shares remain inside the $96-98 trading range. We are going to close this play early tomorrow at the opening bell. I'd be inclined to keep WFM on your watch list in case we see another entry point down the road.

Earlier Comments:
Keep position size small to limit risk.

- Suggested *SMALL* Positions -

Long Sep $100 call (WFM1222i100) Entry $1.45

- or -

Long Oct $100 call (WFM1220j100) Entry $2.50

09/04/12 prepare to exit at the open tomorrow morning

Entry on August 23 at $98.00
Average Daily Volume = 1.7 million
Listed on August 22, 2012


PUT Play Updates

CH Robinson Worldwide - CHRW - close: 56.63 change: +0.02

Stop Loss: 58.05
Target(s): 51.25
Current Option Gain/Loss: -20.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/12: The Dow Jones Transportation average managed a decent bounce off its intraday lows but just barely made it into positive territory. CHRW had a similar move as it ricocheted between $56 and $57. Readers may want to wait for a new drop under $56.00 as an entry point to start bearish positions.

- Suggested *Small* Positions -

Long Oct $55 PUT (CHRW1220v55) entry $1.38

Entry on August 29 at $56.29
Average Daily Volume = 1.1 million
Listed on August 28, 2012


Cummins Inc. - CMI - close: 95.29 change: -1.82

Stop Loss: 100.55
Target(s): 92.50
Current Option Gain/Loss: +47.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/12: Good news! CMI completely erased Friday's bounce with a -1.8% plunge today. Shares are testing round-number support at $95.00 and technical support near its 50-dma. I would not open new positions at this time.

Earlier Comments:
There is potential support at $95.00 and the 50-dma but we are aiming for $92.50.

- Suggested Positions -

Long Sep $95 PUT (CMI1222u95) Entry $1.70

08/28/12 new stop loss @ 100.55
08/28/12 trade opens with CMI gapping down at $98.28

Entry on August 28 at $98.28
Average Daily Volume = 2.3 million
Listed on August 27, 2012


FB - Facebook - close: 17.73 change: -0.33

Stop Loss: 19.15
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: +65.5%
New Positions: see below

Comments:
09/04/12: Shares of FB continue to fall in spite of two different brokerage firms issuing bullish comments on the stock today. There is no change from my weekend comments.

Readers may want to exit now but we are aiming for $17.00 on FB.

Earlier Comments:
Facebook has turned into the stock everyone loves to hate. Facebook has 674 million shares outstanding as of Friday. On August 15th another 268 million shares will see their lockup expire and become available for trading. That is 40% additional shares. If you were an investor or employee and you watched your shares decline from $35 to $20 ahead of your lockup expiration you are probably just waiting for an opportunity to sell. Another factor is that taxes are due on the awarded shares regardless of whether they are sold. That means employees have a big tax bill and they have not been able to sell those shares to pay the taxes. That is an additional incentive to pull the trigger on at least part of their position on August 15th.

Facebook has hundreds of detractors and they seem to be racing each other trying to put a lower price target on the stock. Mark Hulbert was on CNBC on Friday with a $13.80 price target based on a bunch of different metrics.

Facebook also has the various lawsuits over the IPO including the valuation and the various claims made about users and revenue in the days leading up to the IPO. There are plenty of clouds and no real catalysts to pump up the stock.

Facebook said expenses grew by 60% in Q2 and they would grow faster in Q3/Q4. That means earnings will decline.

I am recommending a September option with plans to exit (some time) after the August 15th share lock up expiration.

Suggested Positions

current position: Sept $20 PUT (FB1222U20) entry $1.45

09/01/12 new stop loss @ 19.15
08/18/12 new stop loss @ 20.35, readers may want to take profits now
08/07/12 triggered @ 20.95
08/06/12 adjust entry trigger to $20.95

Entry on August 07 at $20.95
Average Daily Volume = 80.0 million
Listed on August 5, 2012


PetroChina Co. Ltd. - PTR - close: 117.86 change: -2.44

Stop Loss: 121.25
Target(s): 111.00
Current Option Gain/Loss: Sep120p: - 1.3% & Oct115p: - 1.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/12: Thankfully we did not have to wait very long for PTR to hit our entry point. Shares gapped open lower at $119.00 and hit our trigger of $118.75 pretty early.

Earlier Comments:
I do consider this somewhat of an aggressive trade since PTR gaps open (up and down) quite often as its price adjusts to trading back home overnight in China.

- Suggested Positions -

Long Sep $120 PUT (PTR1222u120) Entry $3.65*

- or -

Long Oct $115 PUT (PTR1220v115) Entry $3.16

09/04/12 triggered @ 118.75
*entry price on the Sept. $120 put is an estimate as the option did not trade when our play was triggered.

Entry on September 04 at $118.75
Average Daily Volume = 125 thousand
Listed on September 01, 2012


Weight Watchers Intl. - WTW - close: 46.98 change: -0.79

Stop Loss: 50.10
Target(s): 42.50
Current Option Gain/Loss: Sep47.5p: - 8.1% & Oct45p: -10.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/04/12: WTW continues to underperform with a -1.6% decline on Tuesday. This is a new three-week low. Readers may want to start inching down their stop loss.

- Suggested Positions -

Long Sep $47.50 PUT (WTW1222u47.5) Entry $1.85

- or -

Long Oct $45.00 PUT (WTW1220V45) Entry $1.85

08/28/12 new stop loss @ 50.10

Entry on August 24 at $48.21
Average Daily Volume = 929 thousand
Listed on August 23, 2012


CLOSED BEARISH PLAYS

Dril-Quip - DRQ - close: 70.32 change: +0.28

Stop Loss: 70.75
Target(s): 64.00
Current Option Gain/Loss: -54.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/04/12: DRQ was just a little bit too volatile for us this morning. Shares tagged our stop loss at $70.75 in a choppy session.

The plan was to limit our risk by keeping our position size small.

- Suggested *Small* Positions -

Sep $70 PUT (DRQ1222u70) entry $3.30 exit $1.50* (-54.5%)

*exit price is an estimate. option did not trade when our play was closed.
09/04/12 stopped out at $70.75

chart:

Entry on August 30 at $68.40
Average Daily Volume = 425 thousand
Listed on August 29, 2012