Tag Archives: calls

Two Trades We Entered Today With April Expiration

 

Sometimes a nice gap down at the open provides some great opportunities to add calls on positions you have been waiting for nice entries on. There were two particular stocks I was watching the past few days, and saw a great entry point given the strength of the stocks on an overall weak day.

The first stock is BP Prudhoe Bay Royalty Trust (BPT), a dividend playing trust that had fallen last summer sharply from the $130 level. The stock bounced last ex-divy announcement in the winter, and just released it's next ex-divy date yesterday. Folks were betting on decreasing dividends going forward, and I think the last two dividends show this Bear thesis is not playing out like it should. Be careful because the calls do look cheap, but the dividend is factored in. I grabbed the April 85 calls @ .25 and the May $85 calls @ .50. I will probably sell the April calls sometime before the ex-divy on April 11th, and may hold the May's depending the price.

BPT 4-5

The second trade was on another one of my favorites OpenTable (OPEN). OpenTable (OPEN) touched a multi-year high of $65 on Tuesday, and sold off to $58 today. The stock found a bid and has been flying since, touching $62.50 today. Still think this one is undervalued and a potential buyout candidate. We bought the $67.50 calls @ .30 and may look for $70 calls if it breaks $70. Will update on the trades next week.

 

OPEN 4-5

 

Happy Trading!!

- JB

Chipotle Mexican Grill, Inc (CMG)

 

CMG logo

 

With Corn prices falling sharply the past few days, we expect talk of lowered costs for Chipotle Mexican Grill, Inc (CMG), and see it as a catalyst for the stock to finally break over $330. Chipotle Mexican Grill, Inc (CMG) chart also shows tight bollinger bands, which usually precede a large move (either up or down). We currently hold the April Weekly calls of Chipotle Mexican Grill, Inc (CMG) and will look to add more calls in the next 24 hours.

CORN 4-2

4-2-2013 Watch List

 

 

Quarter 2 started out in the red with the SPY down .40%. The VIX closed up 7% and closed at 13.58. I still think the VIX sees sub $10 in the next few months despite all the folks clamoring for a pullback. Historically Quarter 2 is the worst quarter for the market in recent years, and has seen 5%+ pullbacks in the last few years, where Quarter 1 and 4 have been green, and Quarter 3 has been flat.

 

Today we have have sales numbers for GM and F as well as Factory orders. Everyone will also continue to focus on the job numbers coming friday.

 

Bought the SODA April 55 calls @ .30/.35 yesterday and alerted the trade via the text alert system. As promised, will try and have an update on the blog soon after the alert goes out, so folks have an idea on the reasoning and strategy : https://www.optionmillionaires.com/2013/trade-via-text-alert-today/

 

The only other trade I made yesterday was buying the NFLX 200 calls @ .32 later in the day. Still think NFLX treks over $200 sometime soon, and will continue to place bets on it when i can.

 

Here are the analyst changes today:

 

SNDK SanDisk recommended into Q1 reporta at Nomura

Nomura would be a buyer of Sandisk into the Q1 report as it expects a beat and raise in full year revenue and margin guidance due to pricing strength and the weak Yen. Share are Buy rated with a $60 price target.

TXN Texas Instruments downgraded to Hold from Buy at Stifel

Stifel downgraded Texas Instruments as the firm believes that the company's orders have slowed recently.

NDAQ NASDAQ downgraded to Equal Weight from Overweight at Evercore

FFIV F5 Networks upgraded to Outperform from Neutral at RW Baird

Baird upgraded F5 Networks following positive checks that indicate healthy demand in core markets, traction in Security, a new product cycle, and valuation. Price target is $110.

AAPL iPhone profits likely peaked in 2012, says Jefferies

Jefferies said its global analysis of smartphone markets indicated that profits for Apple's (AAPL) iPhone likely peaked in 2012. The firm concluded that most worldwide smartphone growth going forward will come at prices below $200 per phone, suggesting a low-cost iPhone at $350-$450 may not be cheap enough. Jefferies sees risk to its 2014 earnings estimates for Apple, which it points out are already 20% below consensus expectations. The firm has a Hold rating on shares of Apple with a $420 price target.

BWLD Buffalo Wild Wings initiated with a Neutral at Credit Suisse

Target $92.

LNKD LinkedIn initiated with a Neutral at UBS

Target $180.

GOOG Google initiated with a Buy at UBS

Target $945.

AAPL Apple downgraded to Buy from Conviction Buy at Goldman

Goldman removed Apple from its Conviction Buy List and said the recent product cycle hasn't resulted in as much new user growth or market share as it had anticipated. The firm sees considerable uncertainty regarding the impact of new product refreshes and believes it will be difficult to meet March and June quarter Street expectations. The analyst maintains Apple's Buy rating and reduced its price target to $575 from $660.

 

 

Will be watching a few at open. Still haven’t added a position in OPEN calls yet, and will look again today. Corn prices continue to fall, and hit limit down for a bit on Monday. Folks used the higher corn prices in the past, as a reason to sell CMG so think this actually maybe a catalyst for a move higher. Here is the link to the WSJ article: http://online.wsj.com/article/SB10001424127887324883604578396592983643754.html . Its actually about farmers swtiching from rice to corn and soybeans, but speaks to decrease in corn prices. Also, CMG bollinger bands are getting tight, which is usually a good indicator of a larger move coming (whether up or down). Last, but not least, will try for FFIV calls one more time. Upgraded today and like i said 2 weeks ago, she is ready to bounce in a major way.

 

Here are the strikes on watch today:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
OPEN CALL $70.00 April 0.25 0.30
CMG CALL $335.00 Weekly 0.35 0.35
FFIV CALL $92.50 Weekly 0.18 0.30

 

 

Stay tuned to twitter and chat for any update.

 

Lets have a great day!

 

- JB

Trade via Text Alert Today

 

As promised, we will try and have more information on any text trades that are sent out during the trading day. You can expect one/two texts per week depending on the market.

 

Todays text alert was SODA, the second time in the past few weeks I have alerted SODA. Last time SODA failed to hold 50, and the 52.50 calls @ .15 never materialized. ( https://www.optionmillionaires.com/2013/sodastreamsoda-shares-set-to-rally/ ) Today, SODA broke solidly above $50 on strong volume, and has held its ground. A very bullish sign, and I think SODA breaks into new 52 week high territory in the next few sessions.

We bought the 55 calls @ .30/.35 and will sell half if they become a double. Then hold the rest for a possible move higher. Stay tuned for any changes on the trade.

- JB