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We are a poweful option trading newsletter that focuses on momentum stocks. Momentum can be used to the upside or downside to play call and put options on stocks that are in a clear trend. We target triple-digit returns for all option trades while trying to keep losses at 50%. We have 6-year... More
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  • Rambus (RMBS) Looking To Trip Double-Digits, Options Triple-Digits

    5/21/2103

    12:00pm (EST)

    The option pits for Rambus (RMBS, $8.01, up $0.02) have been active today as shares try to hold $8 and make another push at their 52-week high of $8.19. Traders are favoring the June 9 calls (RMBS130622C00009000, $0.10, down $0.01) as a "cheap way to play a run to $10.

    If shares were to reach $10 by mid-June, the 25% gain in the stock could be worth a 900% return on the aforementioned call options as they would be worth at least $1. A move to $9.20 would double the June 9 calls.

    The risk is that shares stay below $9 by June 22, and in this case, the options would expire worthless. A 10-contract trade would cost you $100 at current levels and we love the risk/ reward this trade has to offer.

    Rambus has been a volatile stock in the past due to the legalities of protecting their patents but they have been reducing their losses and revenue has been picking up. The options expire in less than a month and we will update the trade as it progresses.

    May 21 12:03 PM | Link | Comment!
  • Spider Gold Shares (GLD) Pushing $130

    Gold Continues Its Slide

    5/17/2013

    12:05 (EST)

    We have been all over the gold trade like grass on dirt and with today's $25 drop our downside targets are coming into play. We said after a back test to $1,475, Gold is poised to test new lows south of $1,325. The drop below $1,400 earlier this week was the trigger to go short and today's $25 drop to $1,362 could be the start of another free fall.

    We have been following the Spiders Gold Shares (GLD, $131.80, down $2.29) and the June 125 puts (GLD130622P00125000, $1.80, up $0.50) that are getting a nice 40% pop today.

    We wanted to get into this trade on the break below $140 but we have been late to the sell the gold party. We will see what the chart says over the weekend but if our projections are right, Gold has further weakness and these puts options could continue to do well.

    May 17 12:02 PM | Link | Comment!
  • Cisco Systems (CSCO) Options Active On Upcoming Earnings Announcement

    5/15/2013

    Cisco Systems (CSCO, $21.27, flat) will be announcing their earnings after the close and Wall Street will be eager to hear their numbers. A beat-and-raise should send shares past double-deuces while a disappointment could mean a back test to $20. Shares currently yield 3.2% so there should be some support if they slip.

    Bullish traders can play the May 21 calls (CSCO130518C00021000, $0.60, down $0.05) or the June 22 calls (CSCO130622C00022000, $0.85, down $0.05) for a possible push past $22.

    Bearish traders can play the June 21 puts (CSCO130622P00021000, $0.60, flat) or the May 21.50 puts (CSCO130518P00021500, $0.60, down $0.05).

    The company is expected to earn 49 cents a share on revenue of $12.18 billion. There are 37 analysts that cover the stock and the company has beaten estimates for 4-straight quarters in the past year. They have a history of beating by a penny but in the last two quarters the company has come in 2 and 3 pennies ahead. If Cisco can come in a nickel ahead of estimates then shares could move 5%-10% as a match or a penny beat might not be to exciting for the suit-and-ties.

    Playing options around earnings can be tricky but expect the aforementioned call and put options to be heavily traded today.

    May 15 1:40 AM | Link | Comment!
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