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Call Updates

Research In Motion - RIMM - cls: 121.98 chg: +5.55 stop: 115.75

The market delivered a big bounce today in what many are calling a huge short squeeze or short covering session. It didn't hurt shares of RIMM, which soared 4.7% and reclaimed the $120 level. We see the bounce over $120 as another entry point to consider buying calls. However, keep in mind that this is a very volatile environment and the major indices could give back all their gains tomorrow. RIMM has potential technical resistance near its 100-dma and 50-dma in the $124-126 zone. We have two targets. Our first target is $129.00. Our second target is $137.00. Please note that we're upping our stop loss to $115.75.

Picked on July 31 at $120.50 *triggered
Change since picked: + 1.48
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 18.6 million

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CBOE Volatility Index - VIX - close: 21.14 chg: -2.35 stop: n/a

The market's big gain today pushed the VIX back toward 21. I don't trust the rally in stocks and the VIX has bounced twice from the 21 region more than once in the last 30 days. This looks like an entry point to buy calls on the VIX. Remember, this is a very speculative bet that the market will see a sharp sell-off before September's option expiration and that the VIX will surge toward 30 on the move. Our target is $29.75.

Picked on August 03 at $ 22.57
Change since picked: - 1.43
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Freddie Mac - FRE - close: 8.04 change: +0.52 stop: n/a

One of the reasons that FRE has been trading sideways, albeit in a volatile fashion, is the company's upcoming earnings report. FRE reports tomorrow morning and the current estimates are for a loss of 53 cents a share. Bloomberg came out today and expressed their opinion that FRE and sister company FNM would continue to post losses well into 2009. There was also a story out today that suggested FRE's top management may have ignored warnings about the credit crisis from more than one executive in the company. After the closing bell tonight it was unveiled that the U.S. Treasury has asked Morgan Stanley (MS) to help the government assess the risks facing FNM and FRE. Tomorrow could be a big day as investors react to the earnings news. We're not suggesting new put plays at this time. We consider this a lottery-ticket style of play. The put option is our ticket. If we win, we should win big. If we lose, we lose it all. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower. We are thinking about moving the target closer to $4.00.

Picked on July 20 at $ 9.18
Change since picked: - 1.14
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 45.5 million

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VISA Inc. - V - close: 73.60 change: +1.10 stop: 72.55

It is interesting to see shares of Visa (V) under perform the broader market and the financial sector. V only added 1.5% and volume was just over half the daily norm. That is not a bullish sign. We're suggesting that readers buy puts on Visa if the stock trades at $69.45 or lower. If triggered we have two targets. Our first target is $65.25. Our second target is $61.00.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 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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Apple Inc. - AAPL - close: 160.64 chg: +7.41 stop: n/a

Ouch! Today's bounce in AAPL may have just killed our chances to make a profit in this play. Prior to today's move AAPL was at least moving in one direction - something we needed to see for this strangle play. Shares of AAPL were upgraded before the opening bell to a "buy" and given a $195 price target. The stock gapped open around $155 and soared past the $160 level. We have less than two weeks before August options expire and need to see AAPL well above $180 or under $150. We are not suggesting new strangle positions. The options we suggested were the August $180 calls (APV-HP) and the August $150 puts (APV-TJ). Our estimated cost is $8.90. We want to sell if either option hits $14.50 or more.

Picked on July 20 at $165.15
Change since picked: - 4.51
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 7.09 change: +0.31 stop: n/a

BPOP actually spent the day trading sideways, stuck under resistance at the $7.00 level until a last minute pop higher finally pushed the stock through resistance. We don't see any changes from our weekend comments. More conservative traders may want to consider an early exit now. We are not suggesting new strangle plays on BPOP. The options we listed were the August $7.50 calls (BQW-HU) and the August $5.00 puts (BQW-TA). Our estimated cost was $0.65. We want to sell if either option hits $1.45 or more.

Picked on July 16 at $ 5.82
Change since picked: + 1.27
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 116.01 chg: +3.24 stop: n/a

The DJIA rallied sharply ahead of the FOMC decision today and after the announcement the rally accelerated higher. The DIA is back above the $116 level. 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: + 3.80
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 75.87 chg: +0.22 stop: n/a

After a sharp two-day sell-off in the Brazilian market the EWZ spent Tuesday trading sideways. We don't see any changes from our weekend comments. We're not suggesting new positions at this time. The options we suggested back in early July were the August $90 calls (EWZ-HR) and the August $75 puts (EWZ-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: - 7.19
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 50.75 chg: -5.33 stop: n/a

FWLT plunged to another new relative low thanks to weakness in oil. The dip to $49.16 lifted the August $50 put to $3.70 intraday. FWLT is now very oversold and looks ready for another bounce. More conservative traders may want to exit now to avoid or limit any losses. We are not suggesting new strangle positions in FWLT at this time. The options we suggested were the August $70 calls (UFB-HN) and the August $50 puts (UFB-TJ). Our estimated cost was $2.60. We want to sell if either option hits $4.00.

Picked on July 15 at $ 61.24
Change since picked: -10.49
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.44 chg: +0.34 stop: n/a

GLW is still going nowhere fast. Shares bounced from the $20 level intraday. At this point more conservative traders may want to exit if either side of this strangle gets back into the $0.65-0.85 range to recoup our cost. We are not suggesting new strangle positions. The options we suggested were the August $22.50 calls (GLW-HX) and the August $17.50 puts (GLW-TW). Our estimated cost is $0.75. We want to sell if either option hits $1.50.

Picked on July 10 at $ 20.16
Change since picked: + 0.28
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 479.85 chg: +16.85 stop: n/a

We warned readers that if GOOG were to see a big bounce it would crush the put option values. Today's oversold bounce definitely took a chunk out of the August $480 puts. More conservative traders might want to consider an early exit since we have less than two weeks before August options expire. We're not suggesting new strangle positions in GOOG at this time. The options we listed were the August $590 calls (GOO-HR) and the August $480 puts (GOP-TI). Our estimated cost was $19.10. We want to sell if either option hits $30.00 or more.

Picked on July 16 at $535.60
Change since picked: -55.75
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 50.53 change: +1.43 stop: n/a

A big bounce for tech stocks lifted the HHH to a 2.9% gain. We're right back where we started with less than two weeks to go. This play is essentially a "dead man walking" and we're just waiting for August option expiration. We are not suggesting new positions at this time. The options we suggested were the August $55 calls (HHH-HK) and the August $45 puts (HHH-TI). Our estimated cost is $1.65. We want to sell if either option hits $1.50 or higher!

Picked on July 03 at $ 50.50
Change since picked: - 0.03
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 20.24 chg: +2.30 stop: n/a

LEH experienced a big move today and shares ended up 12.8% by the closing bell. We don't have much time left so readers will want to consider an early exit if either option even gets close to our breakeven price. We're not suggesting new positions at this time. The options we suggested were the September $24.00 calls (LYH-IR) and the September $10.00 puts (LYH-UB). Our estimated cost is $2.15. We want to sell if either option hits $3.50 or higher.

Picked on July 27 at $ 17.05
Change since picked: + 3.19
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 42.85 chg: +2.85 stop: n/a

LM continues to mark gains and the stock added more than 7% today. We don't see any changes from our weekend comments. We are not suggesting new strangles at this time. The options we listed were the August $45 calls (LM-HW) and the August $35 puts (LM-TG). Our estimated cost was $3.15. We want to sell if either option hits $4.85 or more.

Picked on July 23 at $ 40.20
Change since picked: + 2.65
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 51.10 chg: -0.45 stop: n/a

The agriculture and fertilizer stocks continued to sell-off today. Many of them are extremely short-term oversold and due for a bounce. Unfortunately, any bounce would crush any remaining put value, which isn't much. We're not suggesting new positions at this time. 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: - 6.15
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 29.89 change: +0.06 stop: n/a

NFLX under performed the market today. The stock was stuck under resistance at the $30.00 level for the second day in a row. We don't see any changes from our weekend comments. More conservative traders may want to exit early or adjust their exit target. We're not suggesting new strangles at this time. The options we suggested were the August $32.50 calls (QNQ-HT) and the August $22.50 puts (QNQ-TX). Our estimated cost is $1.20. We want to sell if either option hits $2.20 or more.

Picked on July 23 at $ 27.98
Change since picked: + 1.91
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 45.93 chg: +1.50 stop: n/a

Tuesday provided a big rally for the NDX (NASDAQ-100) index but it should be no surprise to see that the Qs remain stuck in their $44-46 trading range. We are not suggesting new strangles and more conservative traders will want to consider closing this play. 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: + 1.03
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.52 change: +0.46 stop: n/a

Shares of SBUX were caught up in the market-wide bounce today. We don't see any changes from our previous comments. We are not suggesting new strangles. The options we suggested for the strangle were the August $14.00 calls (SQX-HK) and the August $13.00 puts (SQX-TJ). Our estimated cost was $1.38. We want to sell if either option hits $2.10 or more. (FYI: The $14 calls hit $2.10 on the July spike to $16.00.)

Picked on July 15 at $ 13.58
Change since picked: + 0.94
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 20.58 change: +1.51 stop: n/a

UBS rallied almost 8% as the financials soared ahead of the Fed statement. UBS has now reclaimed the $20 mark but we're still running low on time. More conservative traders may want to consider an early exit now or adjust their exit target to 75% or 100% of breakeven. We're not suggesting new positions at this time. We listed two different strangles.

UBS Strangle #1) This uses the August $22.50 calls (UBS-HX) and $17.50 puts (UBS-TW). Our estimated cost was $1.90. We want to sell if either option hits $3.00.

UBS Strangle #2) This uses the August $25.00 calls (UBS-HE) and $15.00 puts (UBS-TC). Our estimated cost was $0.90. We want to sell if either option hits $1.90.

Picked on July 13 at $19.49
Change since picked: + 1.09
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Valero Energy - VLO - close: 32.14 chg: +1.15 stop: n/a

VLO managed a decent bounce but the trend remains negative. We are not suggesting new strangle positions. The options we suggested were the August $37.50 calls (VLO-HU) and the August $27.50 puts (VLO-TS). Our estimated cost is $1.38. We want to sell if either option hits $2.25 or higher.

Picked on July 27 at $ 31.88
Change since picked: + 0.26
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million

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Washington Mutual - WM - close: 5.22 chg: +0.35 stop: n/a

WM charged higher, marking a 7% advance, and yet the trend remains very bearish. We are not suggesting new positions at this time. The options we suggested were the August $8.00 calls (WM-HV) and the August $4.00 puts (WM-TH). Our estimated cost is $0.72. We want to sell if either option hits $1.45 or more.

Picked on July 20 at $ 5.92
Change since picked: - 0.70
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million
 

Dropped Calls

SunPower - SPWR - close: 74.23 change: +0.97 stop: 76.45

We are dropping SPWR as a bullish candidate. Our plan had been to buy a breakout over resistance with a trigger at $81.75. This stock has a high amount of short interest and a new relative high could spark a huge short squeeze. The breakout never happened. We're going to drop the stock with the play unopened. However, I want to point out that it looks like SPWR is now trading in a $72-81 range. If this is the case then nimble traders might want to buy calls now with a stop loss under $72.00 and target a rebound back to the $80 region.

Picked on July xx at $ xx.xx <-- never opened
Change since picked: + 0.00
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 2.8 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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