12:45pm (EST)
The market has traded higher for much of today’s session as we are still in a tight range ahead of Friday’s unemployment numbers.
The Dow is currently up 20 points to 10,416 while the S&P 500 is showing a 1 point gain and is at 1,119. The Nasdaq is also up slightly, 2 points, and is riding 2,282.
There is a ton of economic news that has hit the Street today but we won’t bore you with those details.
We wanted to share a story with you as we prepare to launch our trading manual. We are so excited to bring you this option trading manual because it really is going to show you some good trades that will last you a LIFETIME. We often talk about Watch Lists and we show you how to organize, create, and find trades in more detail with our course but here is an example of what you will learn.
First, a little history. We are going to share some quotes from last summer with you and you will see where we are going with this (quotes are from that day):
From June 3rd, 2009:
TiVo (TIVO, $10.70, up $3.32) shares hit a 52-week high on Wednesday after a judge ruled that Dish Network (DISH, $15.56, down $1.68) and EchoStar (SATS, $16.12, down $0.25) will have to pony up nearly $200 million for “video-recorder” patent infringements. This was a windfall for TiVo as the company has lost money for two straight quarters.
After reporting a loss of $4 million, $0.04 a share, versus a profit of $3.5 million a year-ago, TiVo could be on track for more royalties. There is another $100 million in the kitty that could come TiVo’s way from “accumulated interest” for judgments three years ago. Keep an eye on these developments.” (END)
These stories take months to play out and we waited until October 2009 to try and capture our first play on this news. Here were our thoughts:
“The action in TiVo was crazy on Friday. The company is no stranger to the blog and we told you back in June to watch this one carefully. When I was doing the 1pm update on Friday, TiVo popped up again on my alert screen in my brokerage account. I had set an “alert” on my Watch List to inform me of when the stock broke its 52-week high of $11.62 which was set on June 12th. We were watching for clues from this June 3rd update…” (END)
This trade netted our subscribers 18% in 4 days but we exited early because the volume wasn’t continuing like it should when pending news is due out.
We tried again at the end of November when the stock was just under $10. From the Members Area on 11/30/09:
“TiVo got hammered last Wednesday after reporting a loss that matched Wall Street’s estimates, but revenue came in slightly below expectations. The company also set a revenue forecast for the current quarter below Wall Street’s targets.
TiVo also said subscription additions for the third quarter totaled 34,000, compared with 44,000 a year ago.
As some of you may know, TiVo has been locked in a long-running patent dispute with Dish Network (DISH, $20.65, down $0.47) and EchoStar (SATS, $19.56, down $0.48) that is closely being watched by Wall Street.
TiVo also has patent lawsuits against AT&T (T, $26.99, down $0.09) and Verizon Communications (VZ, $31.63, down $0.40) which began court hearings just recently. The company also expects favorable results from these cases as well.
We also like the fact that TiVo’s has partnered with Google (GOOG, $579.76, down $5.98) and Virgin Media (VMEDW, $0.06) to help streamline revenues. These events lead us to believe that TiVo could easily trade back to $12+ with any favorable court ruling over the near-term. This position will NOT have a stop at first due to the current market conditions.” (END)
For this trade, we used the February 12.50 calls and were able to squeeze out a 13% profit and told subscribers to close the trade when the stock was near $11. This was the smart choice as the February options expired worthless as TiVo was back below $10. Until today.
The company announces earnings this Monday and it was a trade we were going to profile tomorrow in our Members Area. We weren’t worried about TiVo’s numbers we just wanted an update on the court rulings. We were thinking “outside of the box” and we knew if the company mentioned something positive on these developments then the stock could pop.
Well, we told you we were going somewhere with this.
Folks, TiVo (TIVO, $15.90, up $5.69) is zooming today as shares are up 60% after getting a positive court ruling. The news hit the market right around 11am (EST).
This was the perfect storm and it hit us 24 hours early. We were looking at the March options and many of you could have been in Hawaii next week sipping on a cold one and enjoying these gains…
The March 10 calls (TUK100320C00010000, $5.70, up $4.55) are up nearly 400% and opened this morning at $1.05.
The March 11 calls (TUK100320C00011000, $4.50, up $3.75) are up 500%.
For you gamblers, the March 17.50 calls (TUK100320C00017500, $0.30, up $0.25) are also up 500%. Over 16,000 contracts have traded hands.
We are always thankful for the trades the market presents us but it goes to show that it is always one step ahead of us. Well, at least TiVo was today.
The good news is that there is ALWAYS a trade and the market has been treating us good lately. However, we feel like that commercial where the one little girl gets a toy pony while the other one gets a REAL pony. Maybe we should have asked TiVo to wait one more day…
Market Looks Strong
Friday, March 5th, 2010
1:00pm (EST)
The bulls are putting an explanation point on this week’s rally as the market continues to move higher. We got all the news we needed this morning when the U.S. jobs declined less than expected. The report is still subject to debate and there are probably a few skeletons in the closet but the “here and now” is that the market is rocking.
The Dow is currently up 83 points to 10,527 while the S&P 500 is higher by 11 points to 1,135. The Nasdaq continues to shine and is showing a pop of 27 points as it stands at 2,319.
We said in our Weekly Wrap that the market could continue to climb a “wall of worry” and this seems to be the case. We have covered a bunch of stocks this week and we have closed several nice trades in our Members Area. Our subscribers closed a F5 Networks (FFIV, $61.13, up $0.43) trade on Wednesday for a 150% gain and a Cree (CREE, $69.13, up $0.06) call option trade for nearly 30% gains.
There were two stocks we followed outside the Members Area this week that are also on a roll.
Walt Disney (DIS, $33.00, up $0.43) got an upgrade a day after these quotes from us on Wednesday:
“Walt Disney led the Dow higher and looks like it wants to challenge its 52-week high of $32.75. We have followed Disney for years and we usually have pretty good success playing call options on the stock. In September 2009, we grabbed our subscribers 72% on a call option trade and we recently closed out another trade for a small 12% win. In other words, there could be a trade here if Disney continues higher.” (END)
We wanted to add some call options on Disney to our portfolio but we held off when the stock popped yesterday.
The other company we want to talk about is TiVo (TIVO, $17.38, up $0.85). We did a big write-up yesterday because there has been a story developing at TiVo since June 2009 that we have been covering like grass on dirt. We profiled 3 options yesterday in our 1pm update that could have easily paid the bills this month:
The March 10 calls (TUK100320C00010000, $7.40, up $0.80) were at $5.70 in our 1pm update yesterday and you could close them now for a 30% gain. Remember, these options opened at $1.05 on Thursday. The total gain from yesterday’s open would be a staggering 600%.
The March 11 calls (TUK100320C00011000, $6.60, up $2.00) were at $4.50 and are up another 48% today.
For our Kenny Rogers fans, the “Gambler” trade we profiled, the March 17.50 calls (TUK100320C00017500, $0.75, up $0.20), are up nearly 40%. Over 53,000 contracts traded hands on Thursday. Wow.
We mention this because these types of trades are what makes option trading so lucrative and why we spend so much time on research. We also wanted to PROVE to people that YOU can make this much money on a single option trade.
We often hear people laugh when we tell them they can make this much money when using options in the stock market because they don’t believe us. People think we are full of sheet. The talking heads say the same thing but we keep it real and here is the devil in the details on where they are wrong.
In 2009, our subscribers made 550% on a Google (GOOG, $563.41, up $8.82) call option trade and a 1,150% on a Research In Motion (RIMM, $68.89, down $0.09) call play.
The point is, we want you in on the action and we want you to trade with us for the long-term. Often times we have subscribers sign up and then cancel after a month because we may have profiled a losing trade. Folks, we are going to have them but we have a track record for a reason. We try to teach patience and when the market is in a rhythm the profits can be super great. The losers suck but the winners make up for that.
We see more juicy trades on the horizon weather the market continues higher or has a sudden reversal. However, we think next week could be another bull run. We will be back Sunday night with the Weekly Wrap with some fresh ideas and a look at next week’s action. We will also be updating all of the CLOSED trades for our 2010 Portfolio so that you can view our results. Current subscribers, check the Members Area for the HOT updates.
Tags: option picks, option signals, options alerts, stock options trading, TiVo call options, Walt Disney option trade
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