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Call Updates

CBOE Volatility Index - VIX - close: 23.15 chg: -2.63 stop:

The VIX has plunged lower, -10%, following a broad-based rebound in the markets today. This doesn't mean the market has bottomed but we could be seeing a short-term correction higher. Don't be surprised if the VIX bounces in the 21-22 zone. We're not suggesting new positions at this moment. We were suggesting the August options. We were listing two targets. One target is $29.50 and a second one at $34.00.

Picked on June 30 at $ 23.95
Change since picked: - 0.80
Earnings Date 00/00/00
Average Daily Volume = n/a million
 

Put Updates

Amazon.com - AMZN - close: 75.04 chg: +2.55 stop: 73.85

Tech stocks enjoyed a strong bounce today. The NASDAQ rallied 2.2%. Shares of AMZN out performed with a 3.5% gain. It looks like AMZN should encounter potential overhead resistance around $77.50 and again around $80.00 and its 200-dma. We're not suggesting new positions at this time. Currently, the play is unopened. Our suggested entry point to buy puts was at $69.75. We'll be watching to see if the bounce fails.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/23/08 (unconfirmed)
Average Daily Volume = 7.2 million
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

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Alpha Nat. Res. - ANR - close: 85.30 chg: - 2.44 stop: n/a

The tug of war in the coal stocks is a violent one but it looks like the bears are winning. Although you do have to give credit to the bulls since ANR rallied form its lows near $77.00 this morning. You could argue that today's bounce near its 50-dma looks like a hammer candlestick (bullish) reversal pattern. We're not suggesting new strangle positions at this time. The July $85 puts hit $9.60 intraday. If you're thinking about backing out and trying to salvage some capital then this is probably the time to consider it. This is a higher-risk strangle play with the options so expensive. The options we suggested were the July $105 calls (ANR-GA) and the July $85 puts (ANR-SQ). Our estimated cost was $9.40. We want to sell if either option hits $14.50.

Picked on June 15 at $ 94.25
Change since picked: - 8.95
Earnings Date 08/05/08 (unconfirmed)
Average Daily Volume = 3.7 million

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Chevron - CVX - close: 95.79 chg: -1.03 stop: n/a

Another swoosh lower for crude oil pushed most of the oil stocks lower. CVX lost just over 1%. We are not suggesting new strangle positions at this time. The options we suggested were the August $110 calls (CVX-HB) and the August $90 puts (CVX-TR). Our estimated cost is $2.20 (based on June 30th prices we needed 2 calls per 1 put). We want to sell if the puts $3.85 or if the calls hit $1.90. More aggressive traders may want to aim higher.

Picked on June 30 at $ 99.13
Change since picked: - 3.34
Earnings Date 08/01/08 (confirmed)
Average Daily Volume = 13.3 million

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DIAMONDS - DIA - close: 113.74 chg: +1.53 stop: n/a

It sure looks like the DJIA is trying to build a bottom. It's been a bumpy ride but the index has gone sideways for the last few days. If you're looking to launch new strangles with the options we suggested then wait for a dip back into the $113.00-112.00 zone. The closer to $112.50 the better. The options we suggested were the August $115 calls (DIA-HK) and the August $109 puts (DIA-TE). Our estimated cost is $4.35. We want to sell if either option hits $6.90 or more.

Picked on July 07 at $112.21
Change since picked: + 1.53
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 81.76 chg: -0.09 stop: n/a

The EWZ spent most of the session hovering around the $80 level. The afternoon bounce might suggest a potential bottom. If you are looking for a new entry point we would try and option positions around $82.50 if you want to use the options we listed. The options we suggested were the August $90 calls (EWZ-HR) and the August $75 puts (EWQ-TO). Our estimated cost is $3.95 We want to sell if either option hits $5.90.

Picked on July 03 at $ 83.06
Change since picked: - 1.30
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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Garmin Ltd. - GRMN - close: 44.10 chg: +1.51 stop: n/a

GRMN is showing some strength here. The stock rallied 3.6% and looks like it's trying to breakout higher from the three-week sideways consolidation along the $42 level. We have just under two weeks left before July options expire. More conservative traders may want to exit early. We're not suggesting new positions at this time. The options we listed were the July $50 calls (GQR-GJ) and the July $40 puts (GQR-SH). Our estimated cost was $2.55. We want to sell if either option hits $ 4.75 or higher.

Picked on June 15 at $ 44.91
Change since picked: - 0.81
Earnings Date 07/30/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Internet Holders - HHH - cls: 52.81 change: +1.64 stop: n/a

A strong rebound in tech stocks fueled a 3.2% jump in the Internet sector. We may have missed our entry point after yesterday's pop higher! Our suggested entry point was the $50.50-49.50 zone, which hasn't been hit yet. The options we suggested were the August $55 calls (HHH-HK) and the August $45 puts (HHH-TI). Our estimated cost is $1.60. We want to sell if either option hits $2.45.

Picked on July 03 at $ 50.25
Change since picked: + 2.56
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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KLA-Tencor - KLAC - close: 40.65 chg: +0.46 stop: n/a

The outlook for this strangle play in KLAC is growing dimmer. Readers are going to want to consider an early exit. We are not suggesting new positions at this time. We have two weeks left before July options expire. We listed two different strangles on KLAC.

Suggested Options:
KLAC Strangle #1) The options we listed were the July $42.50 calls (KCQ-GV) and the July $37.50 puts (KCQ-SU). Our estimated cost is $1.65 We want to sell if either option hits $3.00.

KLAC Strangle #2) The options we listed were the July $45.00 calls (KCQ-GI) and the July $35.00 puts (KCQ-SG). Our estimated cost is $0.70. We want to sell if either option hits $1.50.

Picked on June 22 at $ 40.07
Change since picked: + 0.58
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 3.7 million

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Lehman Brothers - LEH - cls: 22.27 chg: +1.43 stop: n/a

Excellent! LEH provided a great opportunity to open strangle positions near $20.00 today. The stock hovered around the $20 region this morning and then began to rally later this afternoon. We are not suggesting new positions at this time. The options we suggested were the August $25 calls (LYH-HE) and the August $15 puts (LYH-TC). Our estimated cost is $2.54. We want to sell if either option hits $4.25 or more.

Picked on July 07 at $ 20.84
Change since picked: + 1.43
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 44 million

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MarketVectors Agribusiness- MOO - close: 56.39 chg: -1.16 stop: n/a

MOO under performed the market with a 2.3% loss but it did bounce near $55 and its 200-dma for the 2nd time in the last three days. We were suggesting readers open strangle positions in the $57.00-58.00 zone. The options we suggested were the August $62 calls (MYV-HJ) and the August $50 puts (MOO-TX). Our estimated cost is $2.10. We want to sell if either option hits $3.15.

Picked on July 03 at $ 57.25
Change since picked: - 0.86
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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PowerShares QQQ - QQQQ - cls: 45.97 chg: +1.07 stop: n/a

The Qs gave us an opportunity to open strangle positions near $45.00 today. Our suggested entry zone was the $45.25-44.75 region. The options we suggested were the August $47 calls (QQQ-HU) and the August $43 puts (QQQ-TQ). Our estimated cost is $1.80. We want to sell if either option hits $2.75 or more.

Picked on July 07 at $ 44.90
Change since picked: + 1.07
Earnings Date 00/00/00
Average Daily Volume = 148 million

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United States Oil - USO - cls: 109.92 chg: -5.03 stop: n/a

A sharp two-day sell-off in oil was not a great development for our strangle on the USO. However, it does leave the USO at a pivotal spot near the bottom of its bullish channel. Oil should either see a sharp rebound from the bottom of the channel or a sharper breakdown. What we need is a big move and soon. We have less than two weeks left before July options expire and we need to see a bigger move in oil and the USO if these strangles are going to pay off! We are not suggesting new positions at this time. We suggested two different strangles. The strangle with the wider strikes costs less but has higher risk.

USO Strangle #1) The options we listed were the July $115 calls (IYS-GK) and the July $105 puts (IYS-SA). Our estimated cost is $7.10 We want to sell if either option hits $9.75.

USO Strangle #2) The options we listed were the July $120 calls (QSO-GP) and the July $100 puts (IYS-SV). Our estimated cost is $4.10. We want to sell if either option hits $6.50.

Picked on June 22 at $109.14
Change since picked: + 0.78
Earnings Date 00/00/00
Average Daily Volume = 12.5 million
 

Dropped Calls

CNOOC Ltd. - CEO - close: 169.15 chg: +1.96 stop: 164.95

Wall Street's weakness on Monday fueled another sell-off in the Asian markets last night. The Hong Kong Hang Seng market lost 3.4%. When the ADR began trading here in the U.S. shares of CEO plunged to $163.08 before bouncing. Our stop loss was at $164.95. We would be tempted to buy calls again on a new rally over $174.00 or $175.00.

Picked on July 01 at $171.36 /stopped out 164.95
Change since picked: - 2.21
Earnings Date 08/25/08 (unconfirmed)
Average Daily Volume = 500 thousand
 

Dropped Puts

None
 

Dropped Strangles

Holly Corp. - HOC - close: 31.01 chg: -2.00 stop: n/a

Target exceeded. HOC plunged again losing 6% on Tuesday. The stock hit an intraday low of $29.86. This pushed the July $35 puts to an intraday high of $4.70 (honestly, we're surprised it wasn't higher). Our suggested exit was at $3.00 or more. The options we listed were the July $45 calls (HOC-GI) and the July $35 puts (HOC-SG). Our estimated cost was $2.00.

Picked on June 15 at $ 41.25 /target exceeded (strangle)
Change since picked: -10.24
Earnings Date 08/07/08 (unconfirmed)
Average Daily Volume = 1.1 million
 

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