SIRI getting Shorted, What's the Point??

I was reading this blog posting this morning about SIRI getting shorted in anticipation that the merger will not go through (which I disagree with). I might be missing something here, but shorting a stock that's $3 doesn't seem to be worth the risk.

So fine, if the merger doesn't happen and SIRI crumbles ... yay, you get at max 3 points gain on your end. Unless the SEC changes the rules and starts allowing negative stock prices, you know exactly how much you can possibly make. There's no infinite growth beyond 3 points. Boring.

On the other side of the dice, if the merger goes through and Wall Street rallies this sucker to the moon, the level of 'screwing' you (Mr. Shorter) will take is unbounded. Not worth the risk given the reward.

--Kevin

On Tilt ... Laying Low

I am laying low for a little bit for a couple reasons. There is plenty of momentum for stocks like RIMM, AAPL, SPWR, but a lot of it doesn't have anything to do with the actual stock or the companys that are driving those stocks and more about market sentiment and overall industry worries like credit, housing slumps, retail slowdowns -- which makes it difficult to read or at least my momentum model doesn't read very well.

Second reason, is I can feel myself getting more and more greedy these days and I am losing discipline. Ha ha, there's one thing I know about myself over the last couple years of investing -- when Kevin Lam starts getting greedy he starts losing money ;P I am at a solid 30k in 2 months so there's no reason to 'get'al cowboy' :P

Anyways, I've got a couple crazy ideas about what the hot 'item' is going to be this Christmas holiday (and no it's not the iPhone, or is it .. ;P). I'll blog about it after I've given it more thought and research.

--Kevin

That was Unexpected: HP to buy back $8 billion of stock

Just read this, HP to buy back $8 billion of stock. Interesting tidbit from the conference call today was that 66% of HP's revenue was from overseas which is great since the Euro is whooping the USD.

--Kevin

Buy HPQ

HP releases their earnings today and showed weakness during the day so I was 'compelled' to buy these. Here were my catalysts:

• The big unknown is will HP show growth and what will the guidance look like. For the second part, nobody knows but insiders, but first part I based this on empiracle knowledge. Retailers are getting slammed (known) and so they are going to cut prices AND stock up on the stuff that actually sells. If you look by your local BestBuy, Office Depot and whatever, notice that most of the laptops and desktops are HPs? Just trying to solve an unknown with a known.
• Marketing. HP has hired the likes of Serena Williams, Jerry Seinfield, Shrek, Shawn White, Jay-Z, Beyonce, etc. If the world is as weak-minded as marketing people will have you believe, then with that much marketing and brand internalization people will buy. Break down that list into demographics and you'll know why I like HP's marketing strategy even more :P
• P/E: Low at 20.
• Still have plenty of profits from weeks before, so a little gambling here can't hurt :P

Alright, conference call in 1 minute to shed light on guidance.

Buy to Open: 10 calls of HPQ Dec 52.5 at 1.15

--Kevin

Expiration Roundup

Most of these were me being too greedy, overextending my stay or just plain being dumb ;P Nice expensive lessons ... :P

Expired: 50 puts of SPWR Nov 90 at 0.05 (dumb and overextending stay)
Expired: 55 puts of PCLN Nov 75 at 0.05 (dumb)
Expired: 100 calls of CROX Nov 55 at 0.05 (greedy)

Gain: -$1025

-Kevin

Jack in the Box!?

Sadly not much action today (other than last day before options expire). Was scanning through the biggest gainers today and saw an old friend -- Jack in the Box!!. Ha ha, I remember first arriving in the United States and my first meal being Jack in the Box. A friend told me to order the "Western Cheeseburger" (which is not on the visible menu) and it pure reaked carnage on my untrained Canadian stomach -- welcome to America ;P.

--Kevin

Close Call ...

Yes I know horrible pun, but it really was a close call -- those call options I dumped today for $4.90 dropped all the way to $3.45, which amounts to $1450 saved. Just thankful to have taken profits -- someone up there really loves me indeed. Tomorrow should be interesting -- hopefully those puts I have will kick in.

--Kevin

Puts on MSFT

Those November 30 puts I sold for zero gain/loss the other day looked tempting at 0.01 a piece, but for MSFT to fall 4 points or so in 2 days seemed really unlikely -- so I bought December puts instead.

Buy to Open: 20 puts of MSFT Dec 30 at $0.18

--Kevin

Buying Puts on SPWR

SPWR was another of those "this stock is up significantly but I disagree without a real catalyst" stocks. So bought these today:

Buy to Open: 50 puts of SPWR Nov 90 at 0.05

I might be horribly wrong with these, especially since they expire in 2 more business days, but whatever I got away with some easy RIMM stock and APPL call profits today so willing to toss some back in to test out my theory.

--Kevin

What!? You bought RIMM "Stock"!?

If there's one thing that stands out when you read this blog is that I don't ever buy stock -- pretty much all options ... until yesterday. The thing is I find stocks incredibly boring and it's only out of discipline that I actually dabbled with stocks (diversify your investment vehicles horizontally and vertically yada yada). I used to hold all stocks, but my ancestors must have passed down some recessive-ultra-amplified-mutant-gambling-gene because I purged that strategy long time ago ... anyhow tried to break the addiction yesterday and diversify vehicles a little so bought these:

Buy: 10 shares of RIMM at $107.27

Made sense because of the artificial momentum (start on a great foot if I'm wrong and it's real) and if anything I could just average down (average out your cost if I'm right). Anyways, I relapsed and sold them this morning before watching profits fizzle away:

Sell: 10 shares of RIMM at $114.40.

Gain: $71.30 (ha ha, baby-steps, baby-steps!)

Update: RIMM by the way is down to 109 something at the bell. RIMM will probably go lower (unfortunately, because I think the stock/company are great) which is good because I can get in on some cheaper entry points before trying to break the addiction :P

--Kevin

Taking Profits ...

Another "if you woke up earlier you could have had more profits". Yeah yeah, blame it on "fight-night" and I ain't talking about boxing ;P

The momemtum from yesterday afternoon (which I think again is artificial because I refuse to believe one company's earnings is an indicator of the overall health of unrelated industries) continued onto today -- but barely. I ain't sticking around on the call side. Taking profits.

Sell to Close: 10 calls of AAPL Dec 190 at $4.90

Gain: $850

--Kevin

Could be a bad omen ...

My iTunes installation stopped working right after I bought these today ... anyways, I like the momentum so looking for some short term profits. I am actually confused about this market to be honest -- we get all this economic data that suggests trouble and then Walmart reports pretty good earnings and all of a sudden we act like we're free and clear? I am all for a 'bull market' but only if we have actual relevant data in front of us to say so -- not Walmart did well so the world must be ... Oh well time will tell.

Anyways, this kind of unwarranted momentum is great for traders ;P

Buy to Open: 10 calls of AAPL Dec 190 at $4.05

--Kevin

Sell MSFT

I got greedy, watched profits zip away -- which is worse than actually losing money if you ask me. Anyways, these could still possibly be worth something but I am not taking any chances. Live to play another day.

Sell to Close: 200 puts of MSFT Nov 30 at 0.02

Gain: $0

--Kevin

The Party Is Over in Redmond, Lucky Streak Continues ...

Wow, the lucky streak keeps going -- remember these? Microsoft's momentum is indeed shifting downward and these are in the black. I could have sold today for about $600-$700 profit (not bad considering these were throw backs), but judging by the volume and momentum direction towards end of day today, I think I'll be able to fetch a better price tomorrow. That plus Zune 2.0 is releasing tomorrow which I expect will disappoint.

Unless I see significant downward opening momentum tomorrow morning, I am probably going to purge these puts as they will be expiring in 4 business days.

BTW, we have another major power-outage here in my neck of the woods so blogging from our local McDonald's (Starbucks was too busy) using my mobile 3G connection.

--Kevin

The Shat 1, Kevin 0

A friend told me about PCLN popping today and when I looked at it against my momentum model I felt that the pop was unjustified, especially for the volume -- so tossed in a little money to see if my model is correct.

Update: Afterhours (although not indicative of future performance) would suggest that I am indeed wrong. Curse you William Shatner, you win again! ;P

Buy to Open: 55 puts of PCLN Nov 75 at 0.05

--Kevin

CROX

I blogged about my hedge fund theory last night on CROX, my game play and was able to pick up some cheap calls this morning. This week and the past couple have been pretty successful, so I am ok with throwing back a little to the ... (don't say it, don't say it ..) ... nevermind ;P

Buy to Open: 100 calls of CROX Nov 55 at 0.05

--Kevin

CROX Gameplay

Someone posted a comment on a CROX blog here that I didn't see until now (I had moderation turned off by accident) and it got me thinking about how exactly do I game CROX in the short, medium and long term with the least amount of risk to me. I can't tell what CROX will do in the medium, or long, but I do have some ideas about the short. Remember that I am a total amateur, I lose my car keys everyday, and I never knew that McDonald's ice cream cones can come in half-vanilla and half-chocolate until Tuesday this week -- but hear me out.

I read some article on Google Finance about Karen Finerman (some hedge fund manager on appears on the Fast Money show) about how she's not doing well herself with CROX. According to the article, Karen said that CROX was oversold and she picked up some for her hedge fund at $47 or so. It trades now at $35, clearly a loss for Finerman's fund yada yada. Karen says it's oversold, I agree and disagree: it isn't oversold, but rather it will be oversold. Read on.



(Bad picture ;P, she's looks better on the show)

I don't use (or can afford) any fancy tools other than a custom Excel spreadsheet, but here are my guesses at major hedge fund purchases this week:

• Nov 2: Morning and Midday ($49)


• Nov 5: Midday ($47, hi Karen?), End of day ($43-44)


• Nov 6: Beginning of the day ($43-44), and end of the day ($43-44)


• Nov 7: Morning ($43-44)


• Today: Midday ($35) <-- right after a large volume sell-off*.

Now as amateur investors, we don't have fund policies/rules/guidelines to adhere too. So if we take a 60% haircut, no one is going to break our knees. Hedge fund managers on the other hand don't have that freedom, and if the potential loss is too great they are required to sell-off said offending stocks, that being CROX. Interestingly enough, I think midday today we started to see that and some other hedge fund picking up some deals. Now when Nov 5 hedges start selling off then there will be massive supply, and then I think CROX will be oversold. At that point, any hedge that hasn't moved on this will probably pick it up creating a massive reduction in supply and then the stock moves up. The rest of the people who got destroyed this week will jump back in, people holding on will by more to average out -- but the reality is we don't affect volume the way hedge fund managers can. Sorry, we are not unique and beautiful snowflakes ;P

I am thinking another 4-5 points downside (so around $29-30) then I'll be interested. I overestimate the GS fall by a couple points, so maybe 31, 32 area. I'll probably look to pick up several near expiring, aggressive options for cheap tomorrow -- probably dumping no more than $1k (most likely $500) so if I am wrong the risk is minimal to me. And if we do see a recovery, I ain't sticking around for long. I think if you don't see a recovery from CROX by next week, forget about it.

Note: I don't know what hedge fund Karen runs, her performance or even the company she works for, but she isn't a fund manager for nothing. She most definitely is not the moron that the article I was referring to seems to want to make her out to be. Ditto with Cramer, Jubak, and whoever else -- they are not morons!

--Kevin

Got Lucky Again ...

Hey I am not complaining, but looks like I lucked out with the sale of my SPWR options today ... I sold them for $3.70 this morning and now they are back down to $1.80 (2.00 bid, 3.20 ask). If you followed them (which I warned against) when they spiked all the way up $8.00 then sorry friend you just took a $6200 loss :(. No worries though, more profitable ripples to come.

--Kevin

Lucking Out on RIMM

Take a look at RIMM today, lucky I got out with profits yesterday. So what's the play from here, I would personally start looking for entry points (not that anyone but 2 people I know of reads this blog, but I like to document my thoughts).

--Kevin

Countrywide and Bernanke are my Friends

Read this article carefully, I think you'll get clues or some indication of the next couple months. I am waiting for CFC to spike upwards a little more, I've got my eyes on some puts.

--Kevin

Thank You After-Hour Momentum!

Too many other momentum players in the kitchen and the spread on these are ridiculous. Taking my free lunch and looking at puts (people will be taking profits soon enough). I would be careful if you aren't already part of the action.

Sell to Close: 10 calls of SPWR Nov 165 at $3.7

Gain: $1100

--Kevin

Everything on Black Sir ...

Ok, this one could potentially be one of those caught with your hands in the cookie jar AND with your pants down plays -- call on SPWR. Even though I profited a little on the put side (due to the expected profit-taking from the 20 point pop from Monday), there was some interesting volume leading up to the bell today. After hours are not necessarily a good indicator of next day performance (since it's all sharks playing in after hours), but interesting to see SPWR moved 7 points and change after the bell today. I've got a couple reasons for liking SPWR and solar power in general even though the Bank of America analyst poo-pooed on all things solar across the board today, but too tired to go into real detail. Maybe later.

This might be the most moronic play if I've done since my COST and BIDU plays, and wipe out all profits from this week alone. Plus add the fact these expire in 6 business days. Alright, spin that wheel!

Buy to Open: 10 calls of SPWR Nov 165 at $2.6

--Kevin

Sell RIMM

RIMM got some good momentum today from RBC upgrading it, and Credit Suisse (:P, don't ask) upgrading yesterday, and most importantly US dollar weakening -- 3 nice catalyst, but in spite of all that I am not liking what I am seeing today -- take a look at the basing for the last couple hours. I might have just ate a bad banana yesterday, but my gut is telling me something ... oh I know, it was the NILE pop that I missed! ;P Just kidding, seriously time to take profits, I may even buy some puts in about 45 minutes depending on where which direction the momentum is heading and where the volume levels are.

BTW: I still like RIMM, but there will be cheaper entry points later, so might as well take profits now.

Sell to Close: 10 calls of RIM Jan 170 at $6.25

Gain: $1650

--Kevin

Buying RIMM

Got these before closing along with those SPWR puts.

I like Research in Motion's push into the retail market: I was walking around the mall last weekend shopping for my sponsored iPhone which somehow turned into a new iPod Nano for the lady and noticed that it's not just the young professional 'yuppies' carrying around BlackBerry phones, but the younger 'cooler' preppy kids are starting to carry them around. Plus I think T-Mobile is offering Blackberry phones in various colors which will appeal nicely to the younger crowd who are trying to solidify their own unique identities ...

And if you've ever heard me talk about my cool kid/not-so cool kid (being PC here) model you know what's coming in the next 3 years :P.

Buy to Open: 10 calls of RIM Jan 170 at $4.60

--Kevin

Grasshopper, Your Put Kung-Fu is Good, but ...

I decided to try a small experiment yesterday before closing bell after my lessons from Baidu.com. Seems that whenever I find a stock that takes a significant pop in one day, takes a nice drop the next day. I can consistently play the ones that pop moderately (2-10%), but anything beyond that always results in a pie in the face for me a la Baidu, Google, etc.

So with SPWR popping 20 points or so yesterday, I decide to place puts on it to see what happens -- so instead of following my usual pattern of turning left and getting t-boned I turned right this time and ... I am in the black for once! Small risk experiment, small return I'll take it :P

For the record I still like SPWR (moderately, because I get the feeling that it might be another ANDE, remember the ethanol craze that hasn't sky-rocketed yet but has created numerous profitable ripples to play if you're sharp and on your game) in the medium term and short term.

Buy to Open: 10 puts of SPWR Nov 120 at 0.50
Sell to Close: 10 puts of SPWR Nov 120 at 0.75

Gain: $250

--Kevin

Got Lucky with YHOO ...

Looks like I got lucky again with my last week YHOO garage sale (1), (2), and (3). Those options worth about 1/4-1/2 of what I sold for ... so time to pat ourselves on the back? Not quite: if you still believe in YHOO and it's longer term plays then YHOO might be nice and cheap for you right now.

I am personally waiting for the new mail client to come out ... I am not really liking the fact that the new finance.yahoo.com (which was around waaaay long before finance.google.com) has new features that look oddly familiar to finance.google.com. Shows me lack of innovation on their end. Anyways, YHOO got grilled by some government hearing over Chinese dissidents which seems to be pushing YHOO down further. If YHOO drops past 25 or so then you've got me interested again ... :P

Catalyst round up:

1. Alibaba.com IPO: If it's not absolutely fantastic like a Baidu.com or PTR, then YHOO will suffer. Downward catalyst.
2. More Chinese Dissident Stuff: If so felony charges are laid against Yang for some bizzaro reason, for sure downward catalyst, because Yang is seen as the only saving light for YHOO.
3. Panama mail client disappoints ...

Maybe some puts are in order ... blah, not for me. I am still on tilt over missing the NILE earnings so not much trading activity from me this week until I "re-center" myself ... Ohhhmmmmm....

--Kevin

Housing Worries are Over! Everyone start buying homes again!

Cough, cough ... bullsh*t ... cough. Here's some empiracle knowledge for you: today, I was looking at purchasing a new home that was built April 2007. It listed at about $640k then and now 6 months later with no offers (let alone buyers) the builders had to drop their price down to about $560k in a swanky $700k+ neighborhood. If the builders can't sell their homes (with all the perks and stuff) then I doubt everyone else who can't afford their loans anymore can either, which means they won't be able to pay back their loans, which means more write-offs for loan companies. Citigroup just wrote off 11 billion wiping out the possibility of a profitable quarter, Bank of America is writing off too.

Still trying to see where CFC is seeing the light in all this ... because if builders are willing to drop their prices by $80k (and this is a really nice house!) and still no one is biting the housing market must be horrible. BTW, this also gives you some idea as to the kinds of margins builders make per home.

Alright, time to stretch out the old Asian negotiating skills, wish me luck ;P

--Kevin

Oh for the love of God ...

I blog about NILE being a good buy despite everyone else dumping on it AND give reasons for it and stupid me forgets to buy el'cheapo speculative calls on them (blame the business meeting I had today ... actually blame me eyeballing SPWR and stupidity). Earnings released, strong numbers, 9 point bump after hours. Great ... nothing worse than "calling it" and not benefiting from it. Whatever, momentum play on this if NILE ends towards $90 tomorrow AND you get some analyst upgrading it.

Update: to add more insult, short float around 22% ... yeah friend, can you say short squeeze? Alright I am going outside to beat my foot with a stick ...

--Kevin

More Throw Backs

I was hoping that Google's announcement about their mobile strategy was going to have a more 'devastating' effect on MSFT's stock today on top of the fact that MSFT seems to be losing it's initial momentum post earnings. Google didn't make any announcements about the gPhone itself, but rather it's partnership with carriers and providing software.

These showed a tiny bit of momentum this afternoon, but I have a feeling that these will be throw backs since they will be expiring in 2 weeks :( Who knows, maybe I'll get lucky :P

Buy to Open: 200 puts of MSFT Nov 30 at 0.02

--Kevin

Oh Yeah Sorry about the 11 Billion Dollar Writedown, Good Luck with That!

Just doing some research for my strategy this week and came across this: The CEO and Chairman of Citigroup, Charles Prince, is stepping down after Citigroup is expected to take a 11 billion dollar writedown due to subprime issues.

Not sure how the market will initial react to the news. Prince is stepping down and the expected writedown is now known, so Citigroup should make a turn around. 11 Billion is pretty severe so if Citigroup does spike up on news of the CEO leaving, then there will be cheap put opportunities. If the stock opens on a dip there will be some downward momentum to play. Either way, as always, profitable ripples ahead.

--Kevin

Watch out Monday MSFT!

Just read this on Slashdot.org, about Google's gPhone and an announcement about gPhone on Monday from Google. Monday might be an interesting day for MSFT options holders :P Stocks I am not worried about, options (which I don't have anymore of) on the other hand ... might have some nice momentum to play.

BTW, I balked on getting an iPhone and just picked up another iPod for the house.

--Kevin

"It's not you MSFT, it's me ..." =P

I've really got to stop staying up and working on Impacta stuff, because I missed some great sell opportunities this morning on MSFT and CFC -- ya ya, I know about setting limit orders the night before thank you very much >;P. No matter, I am dumping these and taking a small profit because the volume wasn't where I would have liked it to be to continue satisfying my momentum model. There might be some nice panic buy opportunities in the next 15 minutes before the bell, but definitely more buy opportunities next week no doubt.

Alright, time to go get that 'sponsored' iPhone ;P

Sell to Close: 200 calls of MSFT Nov 45 at 0.03

Sell to Close: 100 calls of MSFT Nov 42.5 at 0.07

Gain: $410

--Kevin

Sell HAL

Grandfather batch here from July 2007. I had such high hopes for this one back in July, but with Jan just around the corner and 12 points left to climb, wasn't feel too bullish on this. Just intuition really, HAL is still great in my mind. I watched these go to 0.25 at one point (prior to earnings and SLB stupidity) and then back down to 0.05 ... sigh.

Not that I don't think it could get close to there, but to hit that mark earnings had to be out-of-this-world and that catalyst is long gone so taking a little chunk of profit for now. Without a catalyst you're really just playing with hope :P I have another batch of this stock so if anything hits between now and Jan I can still get in on the fun.

Buy to Open: 100 calls of HAL Jan 52.5 at 0.05
Sell to Close: 100 calls of HAL Jan 52.5 at 0.10

Gain: $500

--Kevin

Up, Down, Up, Down ... Weee ... Sell CFC

I love it! CFC is bouncing back up, which means puts are going to be back on the cheap. Buy again, sell, take profits, repeat. I think there are lot of people who are trying push up CFC since the stock has fallen from 40 (June) to 14 (now) and they want to believe CFC's promise of Q4 profitability. And then there's the camp that believes CFC is bleeding from every hole :O Put the two together and you get nice ripples you can profit from >:P

Sell to Close: 35 puts of CFC Nov 10 at 0.15
Sell to Close: 15 puts of CFC Nov 10 at 0.16 <-- gotta love people who BUY on market orders :P

Gain: $265

--Kevin

Yummy, Yummy ...

I was doing more research into what is the "must-have" toy this season (hence who will report greatest earnings) and came across this Amazon.com product video of the talking Elmo with possessed pizza friend :P. Man, toys sure did change since I was a kid. I remember getting a piece paper, some drinking straws and white glue and making a kite ...

Warning: This song is ultra addictive, I watched it yesterday and can't stop singing it:

- Elmo -

Let's sing the pizza song together!

The pie is made with dough

And we throw it

Into the air!

- Possessed Pizza Friend -

Into the air!

- Elmo -

Ya!

Soon, we'll add some sauces

And them some cheeses

And then we bake!

- Possessed Pizza Friend -
Just like a cake!

- Elmo -
(Demonic laughter)

Yummy! Yummy!

That's a pizza pie!

- Possessed Pizza Friend -

Yummy, yummy!

You toss me in the sky!

- Elmo -

A pizza pie is very nice

It's good to eat them by the slice!

- All Together -

Yummy, yummy, yum!

Making pizza is so much fun!

(demonic laughter all around)

- Elmo -

Hey who ordered the talking pizza?

(more demonic laughter ;P)

The Game of Bullsh*t (Patent Pending)

When I was a kid, we used to play this card game called Bullsh*t. Basically a deck of cards is dealt evenly to all players and they begin by putting cards face down in the middle and stating what those cards are. The other players if they don't believe them can call "bullsh*t" and the cards just placed in the middle are turned over. If that player was lying they would pick up all the cards in the middle. Player with the most cards at the end loses.

Every now and then you'd get the dumb kid that says "5 Aces" and the rest of the kids believe them :P. What does this have to do with investing: well I think that CFC is playing a round or two of home-loan Q4 profitability Bullsh*t. During their earnings call they said the worst was pretty much over and they would return to profitability in Q4. Riiiiight. Anyways, the world took the bait and CFC moved up. I blogged about why I thought this was a mistake and my strategy for playing this nonsense (basically let it go up, buy some puts on the cheap and when the world wakes up you profit) and decided to give the name "Bullsh*t" in honor of that game kids worldwide enjoy.

FYI: The Feds today pumped in $41 billion into the financial system to elevate credit-crunch problems -- the Feds thinks the credit worries are not over. Citi group says credit worries are not over. Bank of America says credit worries are not over. Looks like world minus CFC thinks the credit worries are not over ... ummm OK!

Buy to Open: 50 puts of CFC Nov 10 at 0.10

BTW: Wait for CFC next earnings, if they are right CFC is going to skyrocket, if not expect a royal beat down.

--Kevin

Party over at Redmond!

This week was especially fruitful for me (YHOO, AAPL), so I decided to toss some back into the water and see what I come back up with. A couple catalysts here:

1. The market is taking a good'ol fashion whopping from almost every angle ... except MSFT. When things go bad, people tend to start looking looking for that "happy place". That place where the party is still "hella crack'in yo" (as some of my friends might say) if you will, and that happy place right now is MSFT. While the market took a 360 point body slam today, little o'Microsoft moved up 0.25. If the market continues to do bad, MSFT will probably move up, if the market turns around MSFT will probably move up more. Read on.
2. MSFT has already got some forward momentum. MSFT has traditionally been known as a piggy bank. You put your money there and it'll stay there, you won't gain or lose. Well with last weeks earnings, people who've seen their money go down, up, down and then settle at nowhere for the last 5 years will try to push it to a new base.
3. Having worked at Microsoft, one thing that I know Microsoft is good at doing is highlighting their successes (Halo 3, Halo 1, SDL for Exchange, SDL for SQL Server, etc.) and downplaying their not so successful products (Windows ME, Clippy, and whatever else that has been sent to the grave yard etc.). Who wouldn't, that's just good business. Anyways, no doubt MS will come back with some additional news to add to the current momentum.

Here's what I picked up today:

Lot 1:
Buy to Open: 10 calls of MSFT Nov 45 at 0.01
Buy to Open: 190 calls of MSFT Nov 45 at 0.02

Lot 2:
Buy to Open: 100 calls of MSFT Nov 42.5 at 0.05

At the end of trading, both lots have moved up and are in the black already :P

--Kevin

In the spirit of partying ... here's a link from YouTube!

Bad timing for CROX investors ...

So on top of the outlook disappointment from CROX, investors in CROX also had to take the brunt of the Dow jumping off the cliff and falling 300+ points along with the rest of the market. When the smoke cleared they took a $27 (or 36%) hair cut!

Just to give you an idea of how bad it was, let's say for instance you had 10 calls of Nov 55 before yesterday's close. These options were at $20.00 even per contract, nice! Now after today's close those same options are now worth $1.20 per contract! That's an $18,800 hit in one day!!! If I lost that much in one day I would be swinging by a rope and not writing this blog entry :P

Even though I couldn't get in on any of the carnage today (maybe a good thing), I suspect tomorrow will another "lets kick CROX in the teeth" day, so even cheaper potential entry points. A couple catalysts:

• Hedge fund managers who didn't clear house today will not doubt sell tomorrow before their profits evaporate. Massive supply.
• Cramer who gave up on CROX will also be clearing house if he hasn't already. All his ActionAlertsPlus.com people will soon follow. Medium supply.
• People who still own this stuff and waiting for a miracle will probably give up and sell tomorrow. No way if you take this kind of beating you'll be able to sleep through the weekend. More supply.
• People who got in today around 9:30 and 2:00 pm watched their investment take a mini nose dive. Those who can't stand the pain will be selling tomorrow so they can sleep during the weekend. More supply.

More supply = price nose dive = opportunties (hint hint) :P

--Kevin

Got Kicked in the CROX?

With the whipping ... nay ... beat down that CROX took in after-hours, I was trying to figure out what my strategy should be to play some of the momentum tomorrow. Actually it's pretty easy to figure out: a lot of people will panic, dump the stock, CROX will dip, recover a little, dip some more, plateau, dip, dip, dip ;P. What's more, Cramer just kicked CROX to the curb which will cause even more people to dump the stock in a utter panic ... massive supply, price jumps off a cliff.

In the options world, you know that people are going to be dumping their calls as fast as they can with market-orders and the other side of the fence people are going to try to pick up puts as fast as they can with market-orders. My strategy is going to try to capitalize on those market orders with limit bids that are so ridiculously out of this world cheap that if I get them I probably should take a couple kicks to the temple for being so greedy >:P Alright, orders are in.

--Kevin