Editor's Note:

Shares of Citrix Systems (CTXS) exceeded our bearish target with a big gap down this morning in reaction to its earnings warning.

DECK and ZMH were both triggered. RTN was stopped out.


Current Portfolio:


CALL Play Updates

Deckers Outdoor - DECK - close: 61.34 change: -0.81

Stop Loss: 59.95
Target(s): 68.00
Current Option Gain/Loss: -21.4%
Time Frame: exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/10/13: Thursday proved to be a volatile session for shares of DECK and the stock ended today's session essentially erasing yesterday's bounce. The stock gapped open higher at $62.58, traded up to $63.44 and then reversed. DECK fell all the way back down toward support near $60 and its 50-dma before paring its losses.

I could not find any news headlines to account for today's relative weakness. The fact that DECK did not participate in the market's widespread rally today is a big warning signal. Unfortunately, the morning rally did hit our entry trigger at $62.65 so our trade is open.

- Suggested Positions -

Long NOV $65 call (DECK1316k65) entry $3.50

Entry on October 10 at $62.65
Average Daily Volume = 1.1 million
Listed on October 09, 2013


Zimmer Holdings - ZMH - close: 85.93 change: +1.24

Stop Loss: 83.49
Target(s): 89.75
Current Option Gain/Loss: + 3.7%
Time Frame: exit PRIOR to earnings on Oct. 24th
New Positions: see below

Comments:
10/10/13: A bullish market environment today helped ZMH breakout past resistance and close at new multi-year highs. Shares opened at $85.30. Our trigger to buy calls was quickly hit at $85.55. I would still consider new positions now at current levels.

Earlier Comments:
FYI: The medical device stocks could see a little volatility surrounding the political wrangling in Washington. The republicans and some democrats support repealing the recent medical device tax. Yet Senate Majority Leader Harry Reid and President Obama has rejected any suggestions to repeal this tax. It could be a bargaining chip in the negotiations between both sides over the budget and debt ceiling. Although it's worth noting that shares of ZMH have been ignoring all the drama lately.

- Suggested Positions -

Long NOV $85 call (ZMH1316k85) entry $2.70

Entry on October 10 at $85.55
Average Daily Volume = 1.2 million
Listed on October 09, 2013


PUT Play Updates

McDonald's Corp. - MCD - close: 94.44 change: +1.17

Stop Loss: 94.85
Target(s): 90.25
Current Option Gain/Loss: -35.4%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
10/10/13: Warning! The stock market's big bounce today has lifted MCD back above the $94.00 level, which should have been overhead resistance. More conservative traders may want to abandon ship immediately. I am not suggesting new positions.

Earlier Comments:
Our time frame is only two, maybe three weeks as we do not want to hold over MCD's earnings report expected in late October.

- Suggested Positions -

Long NOV $90 PUT (MCD1316W90) entry $0.93

Entry on October 09 at $93.75
Average Daily Volume = 4.3 million
Listed on October 07, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 70.70 change: +2.34

Stop Loss: 64.00
Target(s): 79.00
Current Option Gain/Loss: +190.1%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/10/13: The market's big bounce today fueled a +3.4% rebound in CBI.

I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

10/01/13 new stop loss @ 64.00, adjust target to $79.00
09/21/13 new stop loss @ 59.75
09/11/13 new stop loss @ 57.65
07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


Vanguard FTSE Europe ETF - VGK - close: 54.67 change: +1.12

Stop Loss: 50.95
Target(s): 58.50
Current Option Gain/Loss: +5.5%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/10/13: All of the major European stock markets closed up sharply higher. That fueled a +2.1% bounce in the VGK.

Earlier Comments:
We are taking a multi-month time frame with this trade. If we are triggered our target is $58.50 but we'll adjust it as the trade progresses. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422L55) entry $1.80*

09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013


CLOSED BEARISH PLAYS

Citrix Systems - CTXS - close: 58.75 change: -7.91

Stop Loss: 70.05
Target(s): 60.00
Current Option Gain/Loss: +170.0%
Time Frame: exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/10/13: Target exceeded.

We were expecting shares of CTXS to gap down this morning in reaction to last night's earnings warning. Shares gapped open lower at $58.36, which immediately closed our trade. Shares settled with a -11.8% decline on the session.

- Suggested Positions -

NOV $65 PUT (CTXS1316w65) entry $2.50 exit $6.75 (+170.0%)

10/10/13 target exceeded
10/09/13 adjust exit target to $60.00.
CTXS is trading near $58.00 a share after hours following an earnings warning.
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on October 09 at $67.30
Average Daily Volume = 1.4 million
Listed on October 08, 2013


Raytheon Co. - RTN - close: 76.26 change: +2.29

Stop Loss: 75.25
Target(s): 70.25
Current Option Gain/Loss: -33.5%
Time Frame: exit PRIOR to earnings in late October
New Positions: see below

Comments:
10/10/13: The widespread bounce today buoyed the defense names. The group outperformed the broader market. RTN also outperformed the major indices with a +3.0% rebound. Shares traded back above the $75.00 level and hit our stop loss at $75.25.

- Suggested Positions -

NOV $72.50 PUT (RTN1316w72.5) entry $1.64 exit $1.09 (-33.5%)

10/10/13 stopped out

chart:

Entry on October 09 at $73.90
Average Daily Volume = 1.63 million
Listed on October 08, 2013