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Precision Profits

Trade Alert: 190% Gain in Vail

Today, we’re going to lock in another triple-digit gain, this time in Vail Resorts (NYSE: MTN).

Vail is one of those companies I always keep on my radar because of how clearly seasonal it is. As the U.S.’s largest ski-resort operator, it’s extremely sensitive to the whims of winter weather — the colder the better. Well, as early snow piled up in its key operating regions these past few weeks, Vail has benefited. This morning, the company announced earnings that topped analyst expectations, sending shares up more than 3%.

This is exactly what we expected to see since Chris Orr forecast a strong ski season.

For our options, that stock jump means we are sitting on a gain of just about 190%! So let’s go ahead and lock in those profits as we near the end of this winter trend.

Action to take: Set a Good ‘Til Canceled limit order to sell to close the MTN January 2016 $110 call option (MTN160115C00110000) at $16.75. At last glance, it was trading at $16.75. Keep this order open until it’s filled.

A couple weeks ago, we closed the first half of this trade for a 65% gain, and now we’re locking in almost 200% on the last half — all in less than four months since we opened this trade.

Locked in Two 100% Gains

A quick update on a few trades that were triggered last week…

Last Thursday morning, you received an alert to sell half of our MarineMax (NYSE: HZO) April call options for a 100% gain. Well, that order was filled shortly after the market opened. If your orders were not filled, that’s fine. Keep them open until they’re executed.

Also, a few weeks ago I sent you an alert to set a 100% and 200% exit order on our Cabela’s (NYSE: CAB) March call options. The 100% limit order was filled Thursday, as well. As with MarineMax, if your orders were not filled, keep them open until they are.

And just a note on our most recent trade: Last week, we bought calls on Polaris Industries (NYSE: PII). Right now, Polaris is a bit down, but remember that options are notoriously volatile. We’ve had options bounce around and then ultimately hand us nice profits numerous times. In fact, Vail is a prime example. A month after we bought calls on the company, the stock dropped 9%, sending our calls down significantly. Now we’re collecting a nice triple-digit gain from that trade. So keep in mind that options will sometimes go down before they come up. In this case, our Polaris options expire in March, so we have plenty of time to see our trend play out — and if you do not own our Polaris options, the March $105 calls are still a buy right now. The price, as I write this, is $3.75 per contract. We originally bought them at $7.20, so grab them at this lower level and be patient as the seasonal trend plays out.

Until next time, good trading…

Jeff Opdyke
Editor, Precision Profits