Editor's Note:

COG continues to surge and hit our second target today. CLB hit our first target this afternoon. We also had our ANF and DECK trades opened this morning. We do want to exit our CSCO trades early.

-James

Current Portfolio:


CALL Play Updates

Abercrombie & Fitch Co - ANF - close: 68.48 change: +2.84

Stop Loss: n/a
Target(s): 69.75, 73.50
Current Option Gain/Loss: + 9.1% & + 11.2%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/11 update: Our ANF trade is now open. Both the stock and the S&P 500 opened higher. Our plan was to buy the Aug. $70 or Sept. $70 calls. ANF surged +4.3%, which is pretty much inline with the market's performance today. The stock is nearing potential resistance near $70.00. Our first target to take profits is the $69.75 level. I am not suggesting new positions at this time.

Earlier Comments:
This is an aggressive, higher-risk trade. ANF is due to report earnings on August 17th. We do not want to hold over the report. I am listing both Aug. and Sept. calls. Keep in mind August calls expire in less than two weeks. We are not listing a stop loss on this trade but if you buy September calls you may want to reconsider and add a stop loss.

- Suggested (SMALL) Positions -

Long AUG $70 call (ANF1120H70) Entry $2.08

- or -

Long SEP $70 call (ANF1117I70) Entry $4.00

08/11 conditions to buy calls were met. ANF opened at $66.46.

chart:

Entry on August 11 at $66.46
Earnings Date 08/17/11 (confirmed)
Average Daily Volume = 2.8 million
Listed on August 9, 2011


Core Labs - CLB - close: 105.33 change: +4.69

Stop Loss: n/a
Target(s): 104.90, 109.75
Current Option Gain/Loss: +52.0% & +105.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/11 update: It was a strong day for energy stocks. CLB rallied +4.66% and closed above potential resistance at the $105.00 level. Our first target was hit at $104.90. The Aug. $105 call had a bid at $1.80 (+44.0%) and the Sept. $105 call had a bid at $3.90 (+95.0%). Our secondary target is $109.75. I do want to remind you that August options expire a week from Saturday. Cautious traders may want to exit their August calls tomorrow just to be safe.

I am not suggesting new positions at this time but a dip and bounce near the $103-102.50 zone could qualify as a new entry point. The problem right now is the spread on CLB's options are too wide. I would not trade the August calls. The spread on the Aug. $105 call is still TOO WIDE with a bid at $1.90 and a $4.00 ask.

Earlier Comments:
It's an aggressive trade so keep your position size small. FYI: August options expire in less than two weeks.

- Suggested (SMALL) Positions -

Long AUG $105 call (CLB1120H105) Entry $1.25*

- or -

Long SEP $105 call (CLB1117I105) Entry $2.00
08/11 1st target hit @ $104.90.
Aug. $105 call bid @ $1.80 (+44%)
Sep. $105 call bid @ $3.90 (+95%)
08/10 no new positions at this time.
08/08 we are REMOVING the stop loss for this trade
08/05 stop loss @ 95.45, under the 200-dma
08/05 play opened.
08/05 *entry price is an estimate. option did not trade today
08/04 Adjusted our strategy for the decline. New stop loss @ 95.80. New targets are $104.90 and $109.75. Buy calls if both CLB and S&P 500 are positive at the open tomorrow.

chart:

Entry on August 5 at $100.23
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 526 thousand
Listed on August 2, 2011


Deckers Outdoor - DECK - close: 87.49 change: +4.77

Stop Loss: n/a
Target(s): 93.50, 97.00
Current Option Gain/Loss: +38.1% & + 8.5%
Time Frame: 1 to 3 weeks
New Positions: see below

Comments:
08/11 update: Our DECK trade is now open. We wanted both DECK and the S&P500 to open positive this morning. Both did so the plan was to buy the Aug. $90 or Sept. $90 calls. Our first target to take profits is at $93.50.

Earlier Comments:
I do consider this an aggressive trade. DECK can be a volatile normally and in this market the moves get a little crazy. We definitely want to keep our position size small. I am listing August and September calls but keep in mind that August options expire in less than two weeks. I am not listing a stop loss on this trade.

- Suggested (SMALL) Positions -

Long AUG $90 call (DECK1120H90) Entry $1.52

- or -

Long SEP $90 call (DECK1117I90) Entry $4.70

chart:

Entry on August 11 at $83.53
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on August 9, 2011


Green Mountain Coffee Roasters - GMCR - close: 103.93 change: + 5.88

Stop Loss: n/a
Target(s): 99.50, 107.50
Current Option Gain/Loss: +259.4% & +165.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/11 update: It was a bid day for the markets but GMCR managed to outperform with a +5.99% gain. The stock tagged $105 this afternoon. Our final target is $107.50. More aggressive traders may want to aim for the $110.00 area instead. Readers might want to consider adding a stop loss too. I am not suggesting new positions. If you're holding August calls I'd be tempted to exit tomorrow. We only have a week left before August expiration.

Earlier Comments:
As a high-risk, speculative play we wanted to keep our position size very small. We are not using a stop loss on this play. FYI: August options expire in less than two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

- Suggested (SMALL) Positions -

Long AUG $95 call (GMCR1120H95) Entry @ $2.74

- or -

Long SEP $100 call (GMCR1117I100) Entry $3.65
08/10 Consider exiting all August options now
08/09 adjusting 2nd target to $107.50
08/09 1st target hit at $99.50.
Aug. $95 call bid $6.30 (+129.9%), Sep. $100 call bid $6.95 (+90.4%)
08/08 we are not using a stop loss on this trade

Entry on August 8 at $91.26
Earnings Date 12/08/11 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on August 6, 2011


O'Reilly Automotive - ORLY - close: 59.02 change: +1.49

Stop Loss: n/a
Target(s): 63.75, 66.00
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/11 update: Hmm... ORLY underperformed the market today. Shares only rose +2.5% versus the +4.6% on the S&P500 and NASDAQ composite. My concern now is that the market's major indices might open higher tomorrow morning and then fade lower into the weekend. Aggressive trades may want to buy calls if ORLY and the major indices open positive tomorrow. I am suggesting we keep our buy-the-dip trigger at $55.00, at least for tomorrow. An alternative entry point could be a breakout or a close over resistance at the $60.00 level.

If triggered at $55.00 we'll readjust our targets.

Earlier Comments:
Use a small position size to limit your risk. FYI: August options expire in less than two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

buy the dip at $55.00

- Suggested Positions -

buy the AUG $55 call (ORLY1120H55)

- or -

buy the SEP $60 call (ORLY1117I60)
08/10 new trigger at $55.00
08/09 adjusted targets to $63.75 and $66.00.

Entry on August xx at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on August 6, 2011


SPDR S&P500 ETF - SPY - close: 117.33 change: +5.04

Stop Loss: n/a
Target(s): 119.75, 122.50
Current Option Gain/Loss: +21.8% & +29.8%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
08/11 update: The SPY and S&P500 staged a strong rebound on Thursday. The SPY hit $118.92 intraday. If the recent trading action is any clue we could see another huge swing lower tomorrow. I am not suggesting new positions at current levels.

Earlier Comments:
We are not using a stop loss on this trade. FYI: August options expire in two weeks. We're expecting the bounce to be fast and sharp but you may want to trade September calls for the extra time.

- Suggested (SMALL) Positions -

Long AUG $118 call (SPY1120H118) Entry $2.15

- or -

Long SEP $120 call (SPY1117I120) Entry $2.55

08/08 trade opened at $115.00. We are not using a stop loss.

Entry on August 8 at $115.00
Earnings Date --/--/--
Average Daily Volume = 235 million
Listed on August 6, 2011


U.S. Oil Fund - USO - close: 33.30 change: +1.52

Stop Loss: n/a
Target(s): $37.50, 40.00
Current Option Gain/Loss: +24.8%
Time Frame: 2 to 3 months
New Positions: see below

Comments:
08/11 update: Oil produced a big bounce today and the USO gained +4.7%. I'd probably look for a dip before launching new positions. Just remember that we're not using a stop loss on this trade so keep your position size small!

Earlier Comments:
This is another lottery-ticket style of play. We are not listing a stop loss. We plan on holding this trade for several weeks.

- Suggested Positions -

Long NOV $34 call (USO1119K34) Entry $2.05

Entry on August 9 at $31.97
Earnings Date --/--/--
Average Daily Volume = 10.7 million
Listed on August 8, 2011


PUT Play Updates

CBOE Volatility Index - VIX - close: 42.99 change: + 7.93

Stop Loss: n/a
Target(s): 26.00, 22.50
Current Option Gain/Loss: -98.0% & -40.0%
Second Position Gain/Loss: -94.4% & - 4.0%
Third Position Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/11 update: The stock market's big bounce took a bite out of the VIX. This index fell -9.2% If the rebound continues for stocks then the VIX should contract pretty quickly.

Earlier Comments:
I am not listing a stop loss on this trade. We should consider this a higher-risk, speculative trade. I'm setting our targets at 26.00 and 22.50. NOTE: August VIX options expire after the 17th of the month. You may want to buy Septembers instead.

- Suggested Positions -

Long AUG $25.00 PUT (VIX1117T25) Entry $2.50

- or -

Long SEP $25.00 PUT (VIX1121U25) Entry $4.00

- Second Position, entered at the open on Monday, Aug. 8th -
(very small positions)

Long AUG $25.00 PUT (VIX1117T25) Entry $0.90

- or -

Long SEP $25.00 PUT (VIX1121U25) Entry $2.50

- 3rd Position, listed Aug. 8th, Open Aug. 9th @ open. -

Long SEP $30.00 PUT (VXI1121U30) Entry $5.70

08/08 3rd position listed to buy at the open on Aug. 9th
08/08 2nd position was filled the open.

Entry on August 5 at $28.48
Earnings Date --/--/--
Average Daily Volume = xxx
Listed on August 4, 2011


CLOSED BULLISH PLAYS

Cabot Oil & Gas - COG - close: 71.20 change: +4.50

Stop Loss: n/a
Target(s): 69.75, 72.00
Current Option Gain/Loss: +438.4% & +166.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
08/11 update: Shares of COG were actually downgraded today but that didn't stop COG from hitting $72.51 intraday. Our second and final target was hit at $72.00 this afternoon. COG still offers opportunity but I'd probably look for a dip or a bounce in the $66-65 area.

Earlier comments:
This is an aggressive trade. The plan was to keep our position size small to limit our risk. FYI: August options expire in less than two weeks.

- Suggested (SMALL) Positions -

AUG $70 call (COG1120H70) Entry @ $0.65 , exit $3.50 (+438.4%)

- or -

SEP $70 call (COG1117I70) Entry $ $2.25*, exit $6.00 (+166.6%)

08/11 2nd target hit @ 72.00
08/10 1st target hit @ 69.75.
Aug. $70 call bid @ $2.75 (+323%), Sep. $70 call bid @ $3.90 (+73.3%)
08/08 * entry price on the Sept. $70 call is an estimate since the option did not trade on Monday.
08/08 COG gapped open lower at $64.23. No Stop Loss.

chart:

Entry on August 8 at $64.23
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on August 6, 2011


CLOSED Market Neutral Plays

Cisco Systems - CSCO - close: 15.92 change: +2.19

Stop Loss: n/a
Target(s): ----
Current Straddle Gain/Loss: +34.2%
Current Strangle Gain/Loss: + 42.8%
Time Frame: less than two weeks
New Positions: no, no new positions at this time

Comments:
08/11 update: The combination of a widespread market rally, better than expected earnings, and a very depressed stock price helped produce CSCO's biggest one-day gain in years. The stock gapped open at $15.45 and surged to $16.24 intraday. Shares settled with a +15.9% gain. A couple of firms upgraded the stock to a buy on the earnings news.

I am suggesting we EXIT NOW because we have August options. My concern is that with only six trading days left for August options any pull back could be troublesome for us. Of course you could choose to hang on and see where CSCO trades next week. Another concern I have is that while the rally was impressive CSCO still has a bearish trend of lower highs. So exit now!

Option Straddle: +34.2%
Option Strangle: +42.8%

Option Straddle (cost: $1.43, current: $1.92 = +34.2%)

Long AUG $14 call (CSCO1120H14) Entry $0.65, current bid $1.87
- and -
Long AUG $14 put (CSCO1120T14) Entry $0.78, current bid $0.05

- or -

Option Strangle (cost: $0.28, current: $0.40 = +42.8%)

Long AUG $16 call (CSCO1120H16) Entry $0.14, current bid $0.32
- and -
Long AUG $12 put (CSCO1120T12) Entry $0.14, current bid $0.02

chart:

Entry on August 10 at $13.93
Earnings Date 08/10/11 (confirmed)
Average Daily Volume = 68.7 million
Listed on August 9, 2011