SVNT taken to the cleaners! Overdone or time to place a small long position?

I agree with most analysts on the street that the selling in SVNT was overdone to say the least! The stock closed down 44% on news that the Company was not able to secure a buyer. Now call me crazy, but haircuts like this don't take place in the biotech world if a Company isn't able to secure a buyout based on an APPROVED drug with very large future cash flow potential. Yes ladies and gentlemen, they have an approved drug and even though they did not get bought for a price tag many on the street were anticipating at north of $26, todays price action changes many things. For one, the stock is definitely something one can now be bullish on purely from a valuation standpoint at $12/share instead of $22 (where it was roughly trading at before the announcement today). Second, they will now likely market the drug themselves which will probably be discussed at an 830AM conference call tomorrow and could include a share offering. There's a few ways to make a bullish play on this stock. One can be long by selling puts and/or just buying upside calls/call spreads from the proceeds coming from selling the puts.

1- The December $12 put is yielding around $1.50 meaning u can pick up a 10% premium right off the bat if the stock were to stay in this range or tread higher (which is what I think will likely happen). If it were to close below $12 at Dec expiration, you would be forced to purchase the stock for $12 and pocket the $1.50 premium which isn't such a bad deal!

2- I would use the $1.50 premium and purchase a Dec 14/17 call spread which currently costs just $0.54 for $3 of potential upside if SVNT were to close above $17/share at Dec expiration. So basically I just used $0.54 of the $1.50 or so I picked up from my earlier trade and pocketed ~$1 NET NET for now if nothing really happened between now and Dec expiration. However, like i mentioned earlier, I think the stock will move higher once we get clarity on the Company's next steps so be prepared to potentially make a killing on this trade!

*** Remember the conference call is 830 AM tomorrow. Details: http://finance.yahoo.com/news/Savient-Pharmaceuticals-to-prnews-441253181.html?x=0&.v=1

Prepare for the Rally...long tech!

As futures point to a higher open today, it seems like once should continue to invest names that have been working. The tech sector has shown amazing strength and in situations where the QQQQ's are up significantly pre-mkt, how can I resist purchasing a tech-leader at the open. I actually like AMZN. The Company reported last Friday and despite the choppy action in the market, the stock closed higher on the back of some pretty amazing growth. What should we look at? I think there's a few different ways to get into this name. The way I'd like to play this would be to purchase upside calls on the weeklies expiring this week. Take a look at the $175 strike calls trading at just around $1. If the stock was to open at or near this, we could purchase 10 contracts for just $1k giving us upside on the stock above $176 at expiration. We probably don't even need to wait that long. If the market pushes higher today and the stock closes in the 173-174 range, I don't see any reason why these calls would not double.

BIDU reporting this week 10/21...whats the trade??? Weekly Call Options!!!

I've been watching the weekly calls on BIDU today and the 115 strike looks particularly interesting. It's up above 80% from Fridays close which is spectacular! I'd buy them for $1.80 and hold on to them for the next day or so. If the stock touches $107-$108, They will likely double again and I would take my initial investment off of the table and let the rest ride until they report. This could set up nicely but be careful as the weeklies expire this week! However, its a cheap way to play the earnings this week which have resulted in some 10% plus moves to the upside.

Apple earnings on Deck tomorrow....Net Long options position with downside protection!

As you all probably know by now, Apple is set to report their earnings after the bell tomorrow. Most on the street expect extremely strong earnings but thats not the real question. The stock has gained over 50% this year and the stakes couldn't be higher tomorrow. Not only does Apple have to beat expectations, but they have to beat them across all categories for the street to justify another lift in share price. Personally I think that apple shares will continue the rise and may even touch $330-$335/share after hours. However, I am definitely recommending protecting your net-long position against any selling of the stock.

I am particularly interested in the 330/340 November Call spread costing us close to $2.6. This means that if apple was to close above $340 at November expiration, we would profit almost $7.90 from this trade. Who doesn't love 3x plus trades?!! But thats not all. I am tempted to purchase some downside puts to participate (and protect our call-spread) by purchasing downside puts on the weeklies at the $290 strike just costing $2.09. If the stock were to collapse on back of some unexpected news, we would stand to make a killing! Do I expect that to happen? Probably not. However, whats a few bucks to participate on any downside action in the stock :).

Long Google!!!!!

October, Nov Calls should be very active today on back of the massive rally in Google shares after the reported yesterday after the close. I'm particularly interested in the Oct 600 strike and the November 630 strike.

Keep the Casino Trade On!

The Casinos continue to be on fire with LVS, WYNN and MGM leading the charge. I continue to be a firm advocate of LVS and WYNN from a bullish perspective. Charts show that they still have plenty of upside potential remaining. Gaming revenues in Macau continue to astonish investors. The call options on both stocks show alot of bullishness. I like the LVS $45 call options trading at $2.13 and the WYNN Nov 120 calls going for just $0.70. I believe 100% moves to the upside in call option pricing for both names is still very possible.

There goes Cloud, but here comes Apple!

I think the cloud trade is over for now but for those of you still looking to place trades on technology, how can you not put some money into the premier name in tech...Apple! The stock is clearly breaking out and with the Streets analyst placing price targets well above $300/share (one just placed a target of $400 recently), its hard not to get involved. I've found some particular interest in the November $330 call strikes. That's ~16% away from where its currently trading at, but I believe that Apple will break $300 before they report next week. I think this could result in a 30-60% move in the option to the upside which is currently trading at $2.90 per contract. Futures are down and tomorrow may provide an excellent entry point to get long Apple options going into earnings. Good luck everyone!

Is it over for Cloud Computing? I don't think so..and Goldman agrees!

So with the recent sell-off in all the could computing stocks, what should we do? The two most interesting in this group are VMW and CRM. Both have been up significantly this year and a pullback should not be treated as an opportunity to exit them. Instead, it gives us a great chance to buy them. How would I do this? Well, to buy 1,000 shares of CRM even at current levels, it would cost $105,000. That's alot of dough. The option chains provide a much cheaper way to participate in any upside in the stock to follow the brutal selling.

The trade? Let's take a look at a short-term approach:

Short-term:

Look at the Oct 110 strike calls that expire in about a week. They are currently trading at $1.20 and any upside in the stock north of $2-$3 would mean at least a 50% move in the option. Remember guys, to participate on the equivalent of 1,000 shares of upside in the stock, we are only shelling out $1,200 (versus $105,000 worth of stock)!

LVS still has legs!

Casinos continued to rally as investors couldn't get enough casino stocks with exposure to China. Names that did particularly well included Wynn Resorts (Wynn) up 4% and Las Vegas Sands (LVS) up 3.6% on very large volume. LVS traded 39 million shares which is nearly 30% higher than its average volume. On a day where the S&P 500 traded lower by almost 1% shows that these guys have plenty of room to run. So, I'm going to make a fairly low risk bet buy suggesting a call strike waaaay OTM. I'm going to go after the $45 strike upside calls expiring Jan 2011. These guys are currently trading around $1.20 and I think that a double is well within reach. I see this stock going to $40/share in the very near-term (within the next 30 days) if this bullish action continues. If that were to occur, B-S suggests these guys almost doubling. Should we hold our for a deuce? No, take 50% upside and run! ;).