The Surf Report--part 2

So maybe surf and Sam is both can be winners. If surf take the profit now like Maverick say, then surf can win. Maverick say surf should take his profit now, or half.

Then if Sam wait for next Friday, he can maybe win too. If Knight have no buyer, and Knioght have no one to give them credit, and they can not pay on the convertible note, hmm?
 
Quote from trendlover:

So maybe surf and Sam is both can be winners. If surf take the profit now like Maverick say, then surf can win. Maverick say surf should take his profit now, or half.

Then if Sam wait for next Friday, he can maybe win too. If Knight have no buyer, and Knioght have no one to give them credit, and they can not pay on the convertible note, hmm?
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How about Sam posting before the fact calls with targets. Then he might be a winner. He already lost thiis one. Wise traders admit defeat and move on Please see thenew Surf's Special Situation Journal in journals section for additional calls when/ if we enter positions.

Surf
 
What are you talking about? What is the bet?
Surf say he can make 100% on the bet. Sam say surf will lose in (7 days 100%)
So Maverick say Sam lose now. But really no one lose in this time because Sam bet in the time of (7 days) So who care if surf is double his money now? The time for the bet is 7 days. How much money surf will have in the 7 days if he (hold) and not taking his profit?
 
Quote from Maverick74:

You already lost. He is up 100% from the time he got in. You denounced the trade on HIS entry price. I think he should probably lock it in here, or at least half. But the point is, you were short this baby from a cost basis of $2 and it has doubled. Bad trade.
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" I think he should probably lock it in here, or at least half. "


Yes...a trader would think that way....but he isn't a trader.




DAVID FABER DAVID FABER ‏@DavidFaberCNBC

Knight Capital gets $400M from four firms through conv pref offering. Conversion price is $1.50 a share, but firm will be saved.






$1.50....ouch......turns a huge winner into a big loser. This is why so many fail at trading.
 
Quote from trendlover:

What are you talking about? What is the bet?
Surf say he can make 100% on the bet. Sam say surf will lose in (7 days 100%)
So Maverick say Sam lose now. But really no one lose in this time because Sam bet in the time of (7 days) So who care if surf is double his money now? The time for the bet is 7 days. How much money surf will have in the 7 days if he (hold) and not taking his profit?
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Looks like Sam is the winner............
 
Quote from traderchi128:

Looks like Sam is the winner............
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Actually it looks like they both lose. Sam said it was going to zero by Friday. Fat chance of that happening. Surf said it would double, which it did, but he didn't sell it. God knows I tried to get him to lock it in. So as far as I can see, this one is still up in the air. Even with the convertible, the stock could trade higher. And it could still go to zero. The game plays on!
 
Quote from Maverick74:

Actually it looks like they both lose. Sam said it was going to zero by Friday. Fat chance of that happening. Surf said it would double, which it did, but he didn't sell it. God knows I tried to get him to lock it in. So as far as I can see, this one is still up in the air. Even with the convertible, the stock could trade higher. And it could still go to zero. The game plays on!
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How can two traders both lose?












Kidding. At this point Sam appears to be more in the right (or less in the wrong in both cases...lol).

I agree with Surf though. Taking a 100% gain would have been too early. Could have at least made 105%.
 
Quote from traderchi128:

How can two traders both lose?












Kidding. At this point Sam appears to be more in the right (or less in the wrong in both cases...lol).

I agree with Surf though. Taking a 100% gain would have been too early. Could have at least made 105%.
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How is Sam more right? The stock will probably still open tomorrow well above Surf's purchase price. Sam said it was going to ZERO! And the stock was at 2.00 when ha made that call.

We'll see where the stock is Friday since Sam actually gave a date on his call.
 
Maverick, I want to ask you this question. If for the options there is more call buyers for Knight, what is that mean? I can think all the call buyers make the bet the price is will go up, so many people bet Knight will go up. Or I can think for all the call buyers, then someone is the writer of the call. So they think Knight will go down, true? So how do you see that? I am really asking to not fight with you, but to understand what the options say to the market. So be nice even you might think the question is stupid. :)
 
Quote from trendlover:

Maverick, I want to ask you this question. If for the options there is more call buyers for Knight, what is that mean? I can think all the call buyers make the bet the price is will go up, so many people bet Knight will go up. Or I can think for all the call buyers, then someone is the writer of the call. So they think Knight will go down, true? So how do you see that? I am really asking to not fight with you, but to understand what the options say to the market. So be nice even you might think the question is stupid. :)
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Trendlover (if that's your real name:) ), I was using the word call option to describe the asymmetry of the bet. That is a bet that has limited risk and unlimited upside. It was not a commentary on the actual option activity in the stock. When one buys a cheap sub $5 stock, one usually views the trade as an option. It's usually a throwaway position that can have a huge payoff. The seller of the stock one could say is analogous to a naked option seller. That is the stock can only go to zero but the upside is unlimited. It's far better to buy $2 stocks then short them.

I have no opinion on the stock itself. My commentary was based on the attractive asymmetry of the payoff. This stock probably provided one as good an opportunity as any other to catch an upside fat tail.
 
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