Even hedging your short RIMM position with a long position in Nokia or Apple or the NASDAQ Composite ETF would have been a big stinker. Ouch.
Many trades go bad when you trade. You cannot expect to do everything in perfection. My timing was a little early but I still believe RIMM is a short and has no chance for a comeback. Bloomberg was showing a chart comparing cellphone companies in 2011 and 2012 and even in just a year RIMM has shrinked a lot. The dominants were Samsung and Apple.
I have no idea if you are right or wrong, and history may very well prove you to be correct. But in the meantime there is no dispute that you are arguing with the market. The market is what the market is. Trades based on fundamental reasoning still require a price-based stop-loss level.
I would not criticize anyone. Trust me I have f-cked up a lot. Just commenting on your strategy of trying to time it perfectly rather than maybe selling some puts and/or buying some ratio of ST calls when the overall market {NDX/NAZ} is/was heading to new highs {until AAPL reported} but still may be setting highs like SPX. Furthermore after 30+ years around options and the markets {investor/trader etc} I still don't get how anyone can say about the stock market, anything like: "{RIMM} has NO chance of a comeback." Please take this as friendly advice - it's great to have a conviction but the best always still ask "what if this or that happens" {i.e. a buyout, etc. etc} bonne chance
I can see that technically we might still be in a downtrend, but that a market retracement to $30 would be quite realistic given how many better positioned shorts there are in the market. Time and timeframes mean everything to me. Think of Market Profile and how the market defines a value area versus a rejected price. In this instance, if we spend some time above $30, the next target would be $50. If the market rejects $30 and breaks the recent Daily trendline upwards, then back down to $10 we would likely head. So, point being, price trend continuation, retracements, rejections, and price trend reversals are all time dependent. The longer the amount of time we spend at or better at a price level, the more ingrained becomes the market's acceptance of that price as fair value. In three months time, the price of $17 might seem ridiculously cheap to other market participants. Look at the bigger picture by looking at longer timeframes. My gift to you. Having an opinion is fantastic provided that you confirm it with price action. You want to make sure that the market finally realizes how fucking brilliant you are. It takes dolts a while to catch up. And fighting them with a move 100 % or 200 % against you just sucks. Price is how we make and lose money. Naturally, being a relative value kind of guy, I had to post this little gem as well. This tells me alot about how other participants compare RIMM's value to it's competitors and the broader tech market perhaps. This tells me that perhaps opinions are changing about RIMM's price valuation compared to industry peers. Or, if you don't agree with that, no doubt that there is a hell of alot of short covering going on and that paying $30 to cover a short initiated at $120 might be reasonable to some other lucky bastard. Like my Daddy always told me: "things are worth what people are willing to pay for them".
Thanks iceman1 and bone who spent your time responding me. I know both of you are extremely knowledgable and experienced in the market and if I disagree with you, it does not mean that I am diagreeing your knowledge or intelligence. I know people see things differently and I know that RIMM as you said might go $30 as AAPL can go $700 next month !!. I remember that when YHOO was at $13 and I was screaming that YHOO is a great buy and the response that I was getting was asking me to compare it with GOOG and calling YHOO the first loser. Now YHOO is at $20.50 in 6 months. I made a good money in YHOO and even at $16.50 I started to short YHOO and repairing my shorts by selling 2x PUTs and eventually I got out at $19. Now back to RIMM: I knew many many people who were excited when AAPL was coming up with new Iphones and were holding off their purchase of new smartphones to get the iPhone and I am sure all of you know many people like that. Do you know any one wh is excited and waiting to buy the new Blackberry? I know none and I know that I am not the center of the universe. Do you know anyone? Do you believe there are enough people who can make an impact on RIMM sales? I have an HTC Thunderbolt which I bought 2 years ago and I can upgrade my phone but I don't see anything better than what I have. The only one that I like is Samsung Note II. Sometimes charts don't say that much. You can draw the lines and assume something will happen. The fact is that RIMM had 11million sales in 2011 and in 2012 it went down to 7. Now lets compare Nokia and RIMM. Not that it matters. Both are going down but I believe Nokia will survive longer because it has a broad range of cellphones that are sold in Asia and Europe compared to RIMM. Nokia does not just make smartphone. Even if I see RIMM has a better smartphone which is even cheaper (that is not the case now), I will buy it only if I see all apps that I deal with are also supported by BlackBerry which is not the case. Let me give you another example. We all know that Honda Civic is an average dependable car (lets assume that at least). Will you buy it if you know that from 2014, Honda might go out of business and will not support or make Honda Civic anymore and you might have difficulty in its spare parts? Now back to my two basic questions: I know there is no 100% in the stock market (there ia always a chance as said in Dum and dummer). 1- Do you really think that RIMM has a chance with its new phone? 2- Do you know anyone who is excited to buy the new BlackBerry? If you are a trader and has recognized that RIMM is going up and got into the bandwagon and and are making money on that, my hat is off to you but I believe this will not last. The biggest joke that amuses me is that the reason that AAPL sales was not that great is that RIMM is chipping away some marketshare.
Unconfirmed rumor is that in beta testing they have found two critical bugs. That is a rumor now but it shows in the price action.