You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
My option trades
- Thread starter ryanpatrick
- Start date
Well, net loss came to -507. Did I miss something? It looks like the Dow is weaker than the other indexes? What's holding the Dow down?
Quote from atticus:
Again, not to harp, but would it have mattered? You would have taken the trade regardless.
Yeah, I woud have taken the trade, but the end result would have been -350 or so instead of -507. the put spread would have costed 200 and I would have gotten around 140-160 back from the put spread. limiting the loss. Limiting losses make a big difference.
Ryan,
With the earnings and revenue miss, WTW might eventually be a $57.00 stock before the next earnings report.
Look at the attached WTW chart. The 80 week moving average is a revision to mean level (57).
Many stocks (but not all) that miss earnings revert to mean value eventually before their next earnings report.
With lots of time before expiration on a strangle (but when option IV was much lower then yesterday), its possible a strangle would have a fighting chance if WTW drops to 57.
These trades take a lot of patience and time....like watching the grass grow! That's why I don't do them anymore (lost patience
in my old age).
Jeff
With the earnings and revenue miss, WTW might eventually be a $57.00 stock before the next earnings report.
Look at the attached WTW chart. The 80 week moving average is a revision to mean level (57).
Many stocks (but not all) that miss earnings revert to mean value eventually before their next earnings report.
With lots of time before expiration on a strangle (but when option IV was much lower then yesterday), its possible a strangle would have a fighting chance if WTW drops to 57.
These trades take a lot of patience and time....like watching the grass grow! That's why I don't do them anymore (lost patience
in my old age).
Jeff
Attachments
Quote from jeffalvinson:
Ryan,
With the earnings and revenue miss, WTW might eventually be a $57.00 stock before the next earnings report.
Look at the attached WTW chart. The 80 week moving average is a revision to mean level (57).
Many stocks (but not all) that miss earnings revert to mean value eventually before their next earnings report.
With lots of time before expiration on a strangle (but when option IV was much lower then yesterday), its possible a strangle would have a fighting chance if WTW drops to 57.
These trades take a lot of patience and time....like watching the grass grow! That's why I don't do them anymore (lost patience
in my old age).
Jeff
what percentage of stocks would you say revert back to the 80-week moving average after an earnings miss?
Quote from HurricaneUS:
what percentage of stocks would you say revert back to the 80-week moving average after an earnings miss?
That's hard to determine because the size of the miss will usually determine the adjustment in price. Mutual fund and Money Managers will now plug WTW's new earnings and revenues data in their value formula's and re-adust the stock price of WTW accordingly.
I leaning towards ACOM calls and NTAP puts.....I know I've made money shorting NTAP stock the past 2 quarterly report. The risk is higher this time around as eventually NTAP will guide above estimates. But, I'll still have to go with what the charts give me and its screaming puts.
As for ACOM, it would have been screaming puts too, except ACOM did mention that they held onto 1.7M subscribers with revenue growth in mid to high teens. If FY12 surprises, shorts should give some back here, again it does have high short at 25% of float, but the numbers need to come in strong. ACOM tried to gap down on Oct 26, but 22 held strong and that's where bulls jumped into the shares. Bears finally gave up some in January when new bulls came into play. Solid earning here would give way to more bulls in play and more bears jumping out. Using feb options I'm thinking 4-6 acom feb 30 calls around $1, with potential of ACOM hitting 32.50.
As for ACOM, it would have been screaming puts too, except ACOM did mention that they held onto 1.7M subscribers with revenue growth in mid to high teens. If FY12 surprises, shorts should give some back here, again it does have high short at 25% of float, but the numbers need to come in strong. ACOM tried to gap down on Oct 26, but 22 held strong and that's where bulls jumped into the shares. Bears finally gave up some in January when new bulls came into play. Solid earning here would give way to more bulls in play and more bears jumping out. Using feb options I'm thinking 4-6 acom feb 30 calls around $1, with potential of ACOM hitting 32.50.
Quote from jeffalvinson:
Ryan,
With the earnings and revenue miss, WTW might eventually be a $57.00 stock before the next earnings report.
Look at the attached WTW chart. The 80 week moving average is a revision to mean level (57).
Many stocks (but not all) that miss earnings revert to mean value eventually before their next earnings report.
With lots of time before expiration on a strangle (but when option IV was much lower then yesterday), its possible a strangle would have a fighting chance if WTW drops to 57.
These trades take a lot of patience and time....like watching the grass grow! That's why I don't do them anymore (lost patience
in my old age).
Jeff
That's what I thought too....and it should have happened already with the way the shares were set to push lower yesterday afternoon. But remember, WTW did launch that modify dutch action to buy its own stock back at no less than $72 to $83. The launch starts next week and lasts for 20 days. We'll have to wait 25 days before the shares even fall below $72. Think about it, if the shares traded at $65 today, I'd put all my money in it, and give it to WTW at $72 (which is the lowest price they will take and no doubt they will take it). This thing holds above $72 for at least another 5 weeks, then we'll see what happens next. The wild card is if these 5 weeks give WTW time to announce that there are new signups to their program as most resolutions are for weight loss in the US. If they come out with such a note, then the shares hold $72 and rallies to $85 on announcement. That's why I mentioned that it looked fishy for WTW to come in with such a dutch auction type share buy back offering now knowing what they knew about their earnings and revenue guidance. It's not even like they were using cash on hand to buy back shares. I believe I read that they are using a credit facility. Why use a credit facility unless you believe shares will not crumble here.
Quote from ryanpatrick:
That's what I thought too....and it should have happened already with the way the shares were set to push lower yesterday afternoon. But remember, WTW did launch that modify dutch action to buy its own stock back at no less than $72 to $83. The launch starts next week and lasts for 20 days. We'll have to wait 25 days before the shares even fall below $72. Think about it, if the shares traded at $65 today, I'd put all my money in it, and give it to WTW at $72 (which is the lowest price they will take and no doubt they will take it). This thing holds above $72 for at least another 5 weeks, then we'll see what happens next. The wild card is if these 5 weeks give WTW time to announce that there are new signups to their program as most resolutions are for weight loss in the US. If they come out with such a note, then the shares hold $72 and rallies to $85 on announcement. That's why I mentioned that it looked fishy for WTW to come in with such a dutch auction type share buy back offering now knowing what they knew about their earnings and revenue guidance. It's not even like they were using cash on hand to buy back shares. I believe I read that they are using a credit facility. Why use a credit facility unless you believe shares will not crumble here.
It's not a tender for the entire float. wtf. The only floor on the shares is zero. It can, and likely will, trade under $60 in the next year.
Jeff
In response to your earlier enquiry. I traded March, as it didn´t make any sense to me to trade the final expiration week. But the trades were paper trades only, and EARNINGS REPORTS, that might not be out yet, as I´ve never traded stock options before. I¨m just going by Ryan´s success.
I don´t understand all the abbreviations and lingo jargon. I will look for a finish of the paper trades in straddles tomorrow. Sometimes they say after the close, for a report, or by 3 p.m. or something. Since it is paper wil just wait and see into tomorrow. Only one trade is winning and won a $1.10. That is XEC. It won that as a straddle spread. I was trying to test an idea of closing a losing side after a report, and going by short term technicals for the held side. CTL seems to be holding it´s own also, after deleting the losingside with a loss of $4.50. Meaning that if you were able to predict likely directional and skip the straddle, it would have made nice money. +$350. Will have to look that up again and see if you could predict before the report, the price direction?
I was curious if a high beta stock would make any difference with the price action. CBS had a high beta of 2.31 and is doing nothing. So maybe the earnings report is not out yet today? CAR has a Beta of 5.72 and I thought that would be a big mover, so far it is losing money either as a straddle, or as a single Call, having closed the PUTS on paper. So HIGH BETA doesn´t seem to be a useful factor yet today on choosing a stock for an earnings report?
People were telling my on my thread, forum trading Long Straddles about; straddles were for volatility and earnings reports, but I ignored the comments, as I thought in my ignorance, ALL earnings reports would come out end of the quarter? Turns out I was wrong and nobody explained THAT PART. Since I found a Yahoo website yesterday, that gives earning reports stock lists for every working day of the month. I never dreamed of such a thing. When I was trading Long straddles I was fixated on trying overlapping straddles as a methodology over a month,with three month out options. ATTICUS is always helpful with his advice, but much of what he says, seems to be an ancient Sumerian language to me or something. I´m actually pleasantly surprised that I am grasping all these gyrations of Ryan, when he is jumping back and forth from Debit spreads, to directional long and other stuff. Having tried them more or less over the past year. The jargon is starting to make some sense, if not the reasons why?
Good educational. Will have to get back to that XEC and see if there would be a way to get a prediction on direction, since I don´t have Ryans background of 5 years of trading earning reports in stock buying. Just to be sure, will wait until tomorrow before drawing any conclusions, as I´m not sure when and what time these earnings reports are due today.
In response to your earlier enquiry. I traded March, as it didn´t make any sense to me to trade the final expiration week. But the trades were paper trades only, and EARNINGS REPORTS, that might not be out yet, as I´ve never traded stock options before. I¨m just going by Ryan´s success.
I don´t understand all the abbreviations and lingo jargon. I will look for a finish of the paper trades in straddles tomorrow. Sometimes they say after the close, for a report, or by 3 p.m. or something. Since it is paper wil just wait and see into tomorrow. Only one trade is winning and won a $1.10. That is XEC. It won that as a straddle spread. I was trying to test an idea of closing a losing side after a report, and going by short term technicals for the held side. CTL seems to be holding it´s own also, after deleting the losingside with a loss of $4.50. Meaning that if you were able to predict likely directional and skip the straddle, it would have made nice money. +$350. Will have to look that up again and see if you could predict before the report, the price direction?
I was curious if a high beta stock would make any difference with the price action. CBS had a high beta of 2.31 and is doing nothing. So maybe the earnings report is not out yet today? CAR has a Beta of 5.72 and I thought that would be a big mover, so far it is losing money either as a straddle, or as a single Call, having closed the PUTS on paper. So HIGH BETA doesn´t seem to be a useful factor yet today on choosing a stock for an earnings report?
People were telling my on my thread, forum trading Long Straddles about; straddles were for volatility and earnings reports, but I ignored the comments, as I thought in my ignorance, ALL earnings reports would come out end of the quarter? Turns out I was wrong and nobody explained THAT PART. Since I found a Yahoo website yesterday, that gives earning reports stock lists for every working day of the month. I never dreamed of such a thing. When I was trading Long straddles I was fixated on trying overlapping straddles as a methodology over a month,with three month out options. ATTICUS is always helpful with his advice, but much of what he says, seems to be an ancient Sumerian language to me or something. I´m actually pleasantly surprised that I am grasping all these gyrations of Ryan, when he is jumping back and forth from Debit spreads, to directional long and other stuff. Having tried them more or less over the past year. The jargon is starting to make some sense, if not the reasons why?
Good educational. Will have to get back to that XEC and see if there would be a way to get a prediction on direction, since I don´t have Ryans background of 5 years of trading earning reports in stock buying. Just to be sure, will wait until tomorrow before drawing any conclusions, as I´m not sure when and what time these earnings reports are due today.