My option trades

Quote from iceman1:

ALGN

patent lawsuit pending


http://www.zacks.com/stock/news/68228/Align-Ortho+Caps+Lawsuit+Continues
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Thanks for the update....remember though I'm just in it for the earnings. I've done nothing in my research that suggest holding this one for more than 2 weeks. I'm basically going with history here that ALGN's earnings beat started in April 2011 and has continued through (August's guidance just matched estimates, hence the small drop post earnings of -5%). As long as ALGN can give solid guidance especially for Q1, then I believe the shares will pull forward with late investors bidding the shares up. But becareful, last April ALGN pushed up post earnings only to drop the following 2 weeks. I totally expect that again with "pig" investors bidding up the day after earnings and then large investors selling shares to push it back down. I also expect at least 1M shares of short to be bought back (we'll see that in the Feb 15 report from nasdaq.com).

As for GMCR, solid numbers last time around and it gets a 20% drop. Sounds to me like someone was in the background pushing it lower so that they could get into a position. If it had been clear cut selling, we would not have seen $45 hold so tightly. The gap down last quarter could also be count in as capitulation...highest volume with that big drop, then we get another attempt to sell off but shares reverse. Previous 3 quarters before last, GMCR has seen 20% pops post earnings. Might be an outlier last time around. I'll test that theory with my money. At the very least, if we get a poor price reaction this time around, then I'll be looking to short at every opportunistic rallies. 22% share float being shorted just doesn't sit well with me if I'm holding puts or short GMCR.

As for the broad market, this week is a jobs report week, I think you get a quiet period heading into Friday morning with small spurts on Wednesday and Thursday morning.
 
Quote from Bry:

wow, ryanpatrick, you are doing great! keep it up, man!

am going to have to spend more time reading thru all your posts, hope you gave us some ideas how you trade earnings

i have to admit i was worried, and naysayers were expecting you to blow up soon; but u have proved them wrong; pls continue to do so
(but u do have more experience than first seemed)

thanks, success to you, bry


Yeah, I do have experience in the research done to predict the direction of an earning move. All I need for this to work is a 50% correct prediction with a risk ratio of 2:1. If I'm correct on earnings 50% of the time and my winners average 100% while loser are limited to 50-60% losses per trade, then I should be set in the long run. I'm not as experienced in the options realm as most might be (just learned that my nflx trade was actually called a condor), but as long as I know debit spreads and long call/put positions I think I should do fine. I'm not even going to test naked puts credit spreads or even more exoctic ones like butterflies and ratio spreads, etc.
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although they are much more expensive, buying options that are sufficiently deep in-the-money will be much more forgiving to let you get a chunk of it back if market goes against you than the cheap at-the-money or out-of-the-money options

just a thought

Quote from ryanpatrick:

Quote from Bry:

wow, ryanpatrick, you are doing great! keep it up, man!

am going to have to spend more time reading thru all your posts, hope you gave us some ideas how you trade earnings

i have to admit i was worried, and naysayers were expecting you to blow up soon; but u have proved them wrong; pls continue to do so
(but u do have more experience than first seemed)

thanks, success to you, bry


Yeah, I do have experience in the research done to predict the direction of an earning move. All I need for this to work is a 50% correct prediction with a risk ratio of 2:1. If I'm correct on earnings 50% of the time and my winners average 100% while loser are limited to 50-60% losses per trade, then I should be set in the long run. I'm not as experienced in the options realm as most might be (just learned that my nflx trade was actually called a condor), but as long as I know debit spreads and long call/put positions I think I should do fine. I'm not even going to test naked puts credit spreads or even more exoctic ones like butterflies and ratio spreads, etc.
More...
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I'm in ALGN BIIB and GMCR....all calls. We'll see how these do. Still have swk, rvbd, syna, and ibm. Sure feel like I'm in too deep here, but small positions only. 2 ALGN feb 25 calls, 2 BIIB 120 calls, and 2 GMCR weekly 55 calls. So out of about $5500, I'm only $2,600 in cash.
 
Quote from ryanpatrick:

I'm in ALGN BIIB and GMCR....all calls. We'll see how these do. Still have swk, rvbd, syna, and ibm. Sure feel like I'm in too deep here, but small positions only. 2 ALGN feb 25 calls, 2 BIIB 120 calls, and 2 GMCR weekly 55 calls. So out of about $5500, I'm only $2,600 in cash.
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Still a massive bull bet.
 
Hey Ryan,

i am in ALGN 2 and I just saw they topped estimates for Q4 but low guidance for Q1, what do you expect for tomorrow price?

Raph
 
Quote from ryanpatrick:

I'm in ALGN BIIB and GMCR....all calls. We'll see how these do. Still have swk, rvbd, syna, and ibm. Sure feel like I'm in too deep here, but small positions only. 2 ALGN feb 25 calls, 2 BIIB 120 calls, and 2 GMCR weekly 55 calls. So out of about $5500, I'm only $2,600 in cash.
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If you feel like you're in too deep you probably are but to do what you're trying to do, you've got to take chances. I sincerely hope it works out for you.
 
yeah, can't bet against that....my indicator says we're still in an uptrend and I'm basing that solely on the new highs vs new lows in NASDAQ and NYSE indices. The ratio is still well above 1 with the NYSE at 20 and NASDAQ at 3.6.

In comparisons, back during the October/November period, on days the market was up, the NYSE had a ratio above 1, but the NSADAQ showed a ratio around 0.5-0.7 (which means new lows clearly outnumbered new 52 week highs).

ALGN already reported and their q1 guidance 0.19-0.21 vs 0.22 clearly missed. Totally expect ALGN calls to be low tomorrow, let's see if I can get some value back. I much prefer to see GMCR rally hard. That's where my money is on this week. I'll also try something on AMZN too, that chart looks bearish.
 
Decided to just sell the algn calls for the loss that it is. I took a hit of ($275.90) on my 2 calls in algn.

Also took out the ibm calls at $4.10, not as high as I'd like but I'll take it now. Gains on that one came to $144.10. I want to see SWK through so I'll hold that, but will be looking to get out of BIIB today too. Already considered RVBD a total loss, just have to wait till feb 18 to see it disappear from my account.
 
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