Booking Priceline (PCLN) Profits

047_priceline

During the start of 2012, Priceline (PCLN) became one of the hottest stocks, running hard from the mid $400 to over $700. A move that befuddled those who thought Priceline(PCLN) was overvalued and ready to fall, but not us: http://www.optionmillionaires.com/2012/the-price-is-right-pcln/ and how we banked huge profits on the move : http://www.optionmillionaires.com/2012/option-millionaires-not-yet-but-getting-there/ . Stocks that can make large moves during the last day or two of option expiration are Option traders wet dreams, and Priceline (PCLN) is a stock that fit the bill. With Priceline(PCLN) still well below it's April high, and the folks buying equities like a clearance sale on Michael Kors, we figured Priceline (PCLN) was bound to make a nice move at the end of the week. Travelzoo(TZOO) also reported better then expected earnings thursday, and figured that may help be a catalyst for a move in Priceline(PCLN) shares.
Posted in our chatroom Thursday:

2013-01-24 10:48:27 AM jimmybob bywisdom $PCLN 690 C .50/.70 entry
 
Tweeted this on Thursday : $PCLN back to the land of make believe, where folks start believing shes going to $1000... Calls before the move over 800 = priceless $$

Then saw the Nomura price Target upgrade friday morning, and figured she would get some mojo. Had these strikes as  2 of 4 positions to look at for the open on our watchlist (http://www.optionmillionaires.com/2013/1-25-2013-watchlist/ ):

 
Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
PCLN CALL $690.00 Weekly 0.65 0.50
PCLN CALL $695.00 Weekly 0.30 0.25

Said this in our chatroom before the open:

2013-01-25 08:26:52 AM jimmybob f PCLN could be in play 5%+ move last nomura U/G i believe

These were all my purchase of the  Priceline(PCLN) calls between Thursday and Friday:

01/24/2013 09:59:20 Bought 20 PCLN Jan 25 2013 690.0 Call @ 0.5
01/24/2013 10:45:51 Bought 50 PCLN Jan 25 2013 690.0 Call @ 0.7
01/24/2013 11:31:26 Bought 37 PCLN Jan 25 2013 700.0 Call @ 0.3
01/24/2013 11:32:15 Bought 2 PCLN Jan 25 2013 700.0 Call @ 0.4
01/24/2013 15:33:49 Bought 50 PCLN Jan 25 2013 695.0 Call @ 0.45
01/25/2013 11:42:28 Bought 30 PCLN Jan 25 2013 710.0 Call @ 0.34
01/25/2013 11:42:28 Bought 20 PCLN Jan 25 2013 710.0 Call @ 0.34

These totaled $9,630 plus commissions. I staggered in and out of the strikes as Priceline(PCLN) moved up, so it was not in my account all at once. With options, you only need a few hundred dollars to return thousands and risking thousands to purchase options alone can decimate your account in short order, so do not try the trade at home please!

If you add up all the strikes and the prices they hit by friday close the $9,630 purchase would be over $430,000. The 70 - $690 calls alone would be worth $199,000 at the $28.50 close from .50/.70 entry. Below are my closing trades for the calls:

01/25/2013 09:54:06 Sold 10 PCLN Jan 25 2013 690.0 Call @ 5.7
01/25/2013 09:54:06 Sold 20 PCLN Jan 25 2013 690.0 Call @ 5.6
01/25/2013 09:54:06 Sold 30 PCLN Jan 25 2013 690.0 Call @ 5.5
01/25/2013 09:54:06 Sold 10 PCLN Jan 25 2013 690.0 Call @ 5.4
01/25/2013 11:50:31 Sold 20 PCLN Jan 25 2013 695.0 Call @ 12
01/25/2013 11:53:46 Sold 30 PCLN Jan 25 2013 695.0 Call @ 9
01/25/2013 12:09:56 Sold 1 PCLN Jan 25 2013 700.0 Call @ 7.8
01/25/2013 12:09:56 Sold 10 PCLN Jan 25 2013 700.0 Call @ 7.64
01/25/2013 12:09:56 Sold 28 PCLN Jan 25 2013 700.0 Call @ 7.62
01/25/2013 12:21:34 Sold 50 PCLN Jan 25 2013 710.0 Call @ 3

The Sales total $133,835 from the $9,630 in less then 24 hours. You can even take that trade and scale it back and use $963 to make $13,383.  Not bad but did leave quite a bit on the table. Again, just shows you the power of options when you have a market that has become very easy to trade as of late.

Trades like these do not happen often, and you are more likely to lose your entire investment buying weekly options expiring in 2 days, then make money.

On to the next trade!

- Jimmybob

 

JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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