Beginner ThinkorSwim Live Webinar
Find the link below to today's live Webinar open for all.
October 21st, 2013 Watch List
Last week was a great one for option traders, as quite a few stocks provided some great opportunities for some major gains on the call side. Last weeks gains in GOOG, CMG, and others can be a bad thing for traders as well... especially for those who either missed the trade, or sold early as it may skew your judgement on future plays thinking the same thing may happen again. And it might, but waiting for the next monster mover, may require patience and quite a bit of capital. It always seems to work out this way, but you will notice most of my huge plays have only a few hundred invested. Meaning you do not need to swing for the fence, and quite honestly, swinging for the fence will have you out of the game in short order. Dust yourself off, come up with a plan, and stick to it!
Here is the Week Ahead Webinar for those that missed it last night : https://www.optionmillionaires.com/forum/showthread.php/631-The-Week-Ahead-With-UPB-and-JB-10-20-2013
I talked quite a bit about some of the earnings plays as well as some of the stocks I like for this week.
SCTY has another upgrade this morning and the stock is up nearly 5%. I remember when the stock was trying to crack $50 and their were folks in the chatroom buying puts or looking at them on this freight train. I know it looks like an easy short, but moves on momentum stocks can go much higher then anyone expects. FSLR is also up nicely again today, and another one to watch, although I will not play that one.
MCD and VFC reported earnings this morning. Looks like MCD disappointed a bit and the stock is down pre-market. VFC reported decent numbers and 4-1 split and the stock is up pre-market. That one maybe a nice play on the pre-split bid up.
We have the September Job numbers out tomorrow before the bell, so will be something to watch.
Here are some of the analyst changes of note to include a $1 price target on $JCP:
JCP J.C. Penney price target lowered to $1 from $5 at Imperial Capital |
Imperial Capital lowered its price target for J.C. Penney shares to $1 citing increasing concerns that the retailer may engage in a financial restructuring in 2014. Imperial believes reports of the possible hiring of bankruptcy counsel and Export Canada cutting all credit to J.C. Penney could be "wearing down vendors and management." The firm keeps an Underperform rating on the stock |
GOOG Google price target raised to $1,210 from $1,065 at Argus |
Argus increased its price target on Google after the company reported stronger than expected Q3 results, as the firm remains upbeat on the outlook for the company's advertising revenue. It keeps a Buy rating on the shares |
SCTY SolarCity coverage resumed with a Buy at BofA/Merrill |
Target $70 |
LVS Las Vegas Sands price target raised to $78 from $68 at UBS |
UBS raised Las Vegas Sands price target given solid Q3 results and expectations for Macau upside. Shares are Buy rated |
ANF Abercrombie & Fitch downgraded to Neutral from Outperform at Macquarie |
Macquarie downgraded Abercrombie & Fitch due to negative sales trends, slow mall traffic, lack of strong fashion trends, and expectations the company will negative pre-announcment ahead of the November 6 investor day. Price target is $36 |
VRTX Vertex Kalydeco data impressive, says Oppenheimer |
Oppenheimer was impressed by data from a study examining the impact of Vertex's Kalydeco on patients in a real world setting. The firm thinks the data will strengthen Vertex's case for Kalydeco reimbursement, and it keeps an Outperform rating on the stock |
AAPL Apple iPad refresh to help bring about bottom in device sales, says Cantor |
Cantor believes that Apple tomorrow will announce the most important refresh to the iPad in the history of the device. The firm thinks the update will help cause sales of the device to bottom and it reiterates a Buy rating on the stock |
AAPL Apple upgraded to Buy from Hold at Societe Generale |
Societe General upgraded Apple ahead of the October 28 report based on strong September data points. The firm said data over the past few weeks from Taiwan and China is strong driven by additional iPhone sales and indicates potential weakness in Android/Samsung handsets. The firm raised its iPhone unit forecast for the quarter to 34M from 30M and upgraded shares to Buy and raised its price target to $575 from $500 |
CRM Salesforce.com upgraded to Strong Buy from Outperform at Raymond James |
Raymond James upgraded Salesforce.com and said it is incrementally more positive following last week's Customer Company Tour in Atlanta combined with favorable fundamentals. Price target raised to $64 from $55 |
CTRP Ctrip.com price target raised to $72 from $48 at Stifel |
Stifel increased its price target on Ctrip as the firm thinks the company continues to benefit from solid China travel industry trends, momentum in mobile engagement, and a renewed focus on distribution. The firm notes that the growth of the number of Chinese flights accelerated last quarter, and Stifel views this as a good sign for Ctrip.com. It keeps a Buy rating on the shares |
Here are the strikes I am looking at for today:
Stock Ticker | Call/Put | Strike | Expiration | Closing Price | Entry Price |
PNRA | CALL | $185.00 | Nov | 0.55 | 0.55 |
IRBT | CALL | $45.00 | Nov | 0.35 | 0.35 |
Will also be watching NFLX for an opportunity.. If I see one, I will post in chat and twitter right away.
Lets have a great start to the week!!
- JB
$GOOG: Buying calls turns $300 into $10,600 in 48 hours – Why We Trade Options
Sometimes Buying Calls Is The Right Move
Option trading is extremely risky, especially when buying calls or puts on an equity you do not own, as these positions can fluctuate rapidly in price and more then likely will expire worthless. As we have discussed many times on this blog, that high risk can come with some very nice rewards. Friday was a great example of how some risky out of the money trades paid handsomely.
The first trade was buying calls of GOOG, a play we had mentioned on our week ahead Webinar and at the start of the week on our Watchlist :
Here is a prescient post from our October 3rd Watchlist around our trading strategy that has yielded some big winners over the past few years: https://www.optionmillionaires.com/2013/october-3rd-2013-watch-list/
I always say, stocks tend to move when you least expect them, and I always like to have ‘skin in the game’ for when they do. For example, playing PCLN the last few weeks for the past 2 day move would have paid nicely. But if the stock never has it’s breakout, your stuck with losing money week after week. GOOG is another stock that I have been waiting for to breakout that has caused me harm buying weeklies.
Here is what we said on our watchlist last week:
Earnings season starts to heat up with some fun names reporting.. ISRG, CMG, and GOOG are a few I will try and play.
Buying calls of some GOOG 965, and will look for a 1-2% move on GOOG in the coming days, and hope to lock some or all in for a double as the premium builds into earnings.
On the watchlist on October 15th : https://www.optionmillionaires.com/2013/october-15th-2013-watch-list/
Stock Ticker | Call/Put | Strike | Expiration | Closing Price | Entry Price |
CMG | CALL | $510.00 | Weekly | 0.60 | 0.45 |
GOOG | CALL | $965.00 | Weekly | 0.40 | 0.35 |
Our trades posted on our private twitter:
And unlike other sites who may just post ideas, we actually put our money where our mouth is. Here are the trades, which were also posted in our chatroom and you can watch any good option streaming service to see them go through. In other words, when we were buying calls, our members knew we were buying calls. (and precisely which calls we were buying)
We then closed the $965 calls on Thursday, as GOOG was showing some weakness, and wanted to take some risk off:
Google (GOOG) beat estimates, the stock gapped up nearly 10%, and we went and closed our calls after the open:
So the original $300 investment on Tuesday for the $960 calls yielded $10,300 in profits. If we would have held for later in the day, the calls would have sold for $55, or $27,300 in profits from a $300 investment. And of course, if we held our $965 calls, our profits would have been more than double that number. This is a great example of how weekly options can be a rewarding trading strategy and how sometimes buying calls pays off exponentially.
Friday was also a great day to trade Chipotle Mexican Grill (CMG) and Amazon (AMZN). Both stocks were on our watchlist friday morning and this is what we said:
CMG reported some good revenue numbers and is up 7% pre-market despite the EPS miss. Funny how folks were on the short CMG bandwagon a year ago, and now it looks poised to break $500 and sport a crazy 50x+ P/E ratio. If they thought overvalued then, what will they call it now?
Big AMZN upgrade and may try some lotto 325s. May try some CMG lottos as well, as they may push her to $490 today
Here were the two strikes we had on our watchlist Friday morning... and thats right, only two and they both were up over 1000%:
Stock Ticker | Call/Put | Strike | Expiration | Closing Price | Entry Price |
AMZN | CALL | $325.00 | Weekly | 0.02 | 0.10 |
CMG | CALL | $485.00 | Weekly | 0.95 | 0.35 |
Little did we know both stocks would provide similar money making opportunities.
We were able to purchase the $325 Amazon(AMZN) calls at the open for $.15 , later in the day those would trade for over $7.00. So our $150 investment would be worth over $7k. Unfortunately we did close them for a near double:
Busy buying calls on Amazon (AMZN) and GOOG (GOOG), we missed our entry on the Chipotle Mexican Grill (CMG) calls, although they were very pricey and the risk seemed too much for the possible reward... that is unless we thought it was going to break $500. We went ahead and bought the $505 calls:
Chipotle Mexican Grill (CMG) continued to move to the upside breaking $500 then struggled to break $508. We then went ahead and closed the $505 calls for a nearly 400% gain in a few hours.
It was a great ending to a great week. I would call this past friday, an 'Option Traders Wet Dream'. Plays like SINA, BIDU, SCTY, GOOG, CMG, AMZN, and other provided huge money making opportunities. Trades and days like these do not happen all the time, but they can more then offset a bad week, or month.
We do offer a Three-Day trial for those who want to check out what we are all about here. Option trading is not for everyone, so three days should give you enough time to find out for yourself : https://www.optionmillionaires.com/subscribe/
Have a great weekend!!