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.
Option trade idea on YHOO
- Thread starter hajimow
- Start date
YHOO opened at 15.02 today down from 15.15 which was Friday's close. The reason is that Stifel Nicolas downgraded it to hold (not that it reallt matters). Now it is back to 15.15 and 15.16 (time 10:00 AM). It shows some sign of bottoming and bullishness. I recommend the following strategies:
1- Buy the shares
2- Buy Call 16 for Sept (Plain Vanilla)
3- Sell PUT 15 and buy Call 16 for Sept. (Risk reversal)
1- Buy the shares
2- Buy Call 16 for Sept (Plain Vanilla)
3- Sell PUT 15 and buy Call 16 for Sept. (Risk reversal)
Up to 15.20 in 10 minutes after I posted. My pick from the 3 trading ideas that I mentioned is risk reversal.
Bid/ask for Call 16 is 0.17/0.18
Bid?Ask for PUT 15 is 0.38/0.39
You get a credit of 0.21 for this trade with less commission it would be 0.19. You will start to lose if YHOO closes below 14.81 by Sept option expiry. Your gain is unlimited. If YHOO spikes before expiry, I will sell Call 17 (which will be coverd)
Bid/ask for Call 16 is 0.17/0.18
Bid?Ask for PUT 15 is 0.38/0.39
You get a credit of 0.21 for this trade with less commission it would be 0.19. You will start to lose if YHOO closes below 14.81 by Sept option expiry. Your gain is unlimited. If YHOO spikes before expiry, I will sell Call 17 (which will be coverd)
I'm still waiting for an opportunity to sell a $13 put on YHOO for Oct., when the credit is $0.30 or higher.
My goal is an annualized % return somewhere in the "teens".
I don't see much tech support until the $14 - $14.50 area, per the 2 year chart.
Thus, that is where I'm waiting for it to trade, and then use a $13 strike for my cushion, as there is reasonable support in that area as well..... in case the $14 support is broken.
I'm not predicting the stock will test the $14 - $14.5 area.
I'm just saying that is where the tech support is, per the 2 year chart.
Thus I hope to take advantage of the situation, to initiate a $13 strike, if it occurs.
The companies fundamentals are a mixed blend of good and "so-so".
But overall, pretty reasonable.
But because of the blend of good and "so-so" criteria, that puts more importance on the stocks L-T technical support.
Hence the reason I've only been watching it, as I wait for it to test that L-T tech support of $14 - $15.50.
But again, it's overall fundamentals, (aside from a few issues), are pretty reasonable. Hence the reason I'm interested in the company.
But only if it trades in the $14 - $14.50 area, so i can get my desired $13 strike and credit.
I'm not predicting it will ever get there for the test. I'm just saying i won't be getting in unless it does.
http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=l&q=b&c=
My goal is an annualized % return somewhere in the "teens".
I don't see much tech support until the $14 - $14.50 area, per the 2 year chart.
Thus, that is where I'm waiting for it to trade, and then use a $13 strike for my cushion, as there is reasonable support in that area as well..... in case the $14 support is broken.
I'm not predicting the stock will test the $14 - $14.5 area.
I'm just saying that is where the tech support is, per the 2 year chart.
Thus I hope to take advantage of the situation, to initiate a $13 strike, if it occurs.
The companies fundamentals are a mixed blend of good and "so-so".
But overall, pretty reasonable.
But because of the blend of good and "so-so" criteria, that puts more importance on the stocks L-T technical support.
Hence the reason I've only been watching it, as I wait for it to test that L-T tech support of $14 - $15.50.
But again, it's overall fundamentals, (aside from a few issues), are pretty reasonable. Hence the reason I'm interested in the company.
But only if it trades in the $14 - $14.50 area, so i can get my desired $13 strike and credit.
I'm not predicting it will ever get there for the test. I'm just saying i won't be getting in unless it does.
http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=l&q=b&c=
I never speculate on buyouts or burnouts. I prefer analysis.
As with most tech stocks, they can be so volatile, you really have to look at L-T charts for price selection. If you look at a one month or even a 3 month chart, you are likely to see up or down chart patterns, that can disappear in the blink of an eye.
Hence, those S-T up or down trends are not only useless and meaningless, they can also be extremely risky to rely on.
Hence the reason I use a minimum of 2 year charts, for analysis and price selection.
As with most tech stocks, they can be so volatile, you really have to look at L-T charts for price selection. If you look at a one month or even a 3 month chart, you are likely to see up or down chart patterns, that can disappear in the blink of an eye.
Hence, those S-T up or down trends are not only useless and meaningless, they can also be extremely risky to rely on.
Hence the reason I use a minimum of 2 year charts, for analysis and price selection.
yeah.. very true... your better off being long volatility then short.. IE netflix, GMCR, ZNGA.. etc.. etc.. etc.. if i were to quickly glance at a long term chart . i would guess this.. and this isn't something i'm investing in.. but it looks like it was drifting up on lower and lower volatility.. in some asending triaingle.. then it just fell out of the hole at the end of the triangle.. its the beginning of the dumping of equities.. the most speculative ones like yhoo and tech stocks are the first to go.. besides.. the chart looks on the five year looks like its going no where.. looks weak! i seriously think there is more risk to the downside.. thats just me
<<< its the beginning of the dumping of equities.. the most speculative ones like yhoo and tech stocks are the first to go.. besides.. the chart looks on the five year looks like its going no where.. looks weak! i seriously think there is more risk to the downside.. thats just me >>>
After reviewing the fundamentals of YHOO, I don't think i would place it in the speculative category. It's actually a reasonably financially stable company.
But as with all companies, the error some investors make is, they invest based on the companies name, or the "story" that surrounds the name.
Investors sometimes forget, they are actually investing at a specific price. Not the "story". The story remains the same, regardless of the trading range of it's price.
As for the 5 year chart you mentioned, I'll speak to the "4" year chart instead.
If you erase the few spikes on the high and low ends over the past "4" years, the stock shows a pretty consistent trading range between $13 and $17.
What you refer to as "weak" with more risk to the downside,... I view as the stock simply coming into the lower half of it's L-T $13 - $17 trading range.
Thus, the lower it drops, the more bullish I become.
Hence my desire to sell a $13 put if/when the stock trades in the range of $14 - $14.50.
After reviewing the fundamentals of YHOO, I don't think i would place it in the speculative category. It's actually a reasonably financially stable company.
But as with all companies, the error some investors make is, they invest based on the companies name, or the "story" that surrounds the name.
Investors sometimes forget, they are actually investing at a specific price. Not the "story". The story remains the same, regardless of the trading range of it's price.
As for the 5 year chart you mentioned, I'll speak to the "4" year chart instead.
If you erase the few spikes on the high and low ends over the past "4" years, the stock shows a pretty consistent trading range between $13 and $17.
What you refer to as "weak" with more risk to the downside,... I view as the stock simply coming into the lower half of it's L-T $13 - $17 trading range.
Thus, the lower it drops, the more bullish I become.
Hence my desire to sell a $13 put if/when the stock trades in the range of $14 - $14.50.