OK so the stock was at $17 a month ago, headed back to $3. Earnings out today and yesterday SBLK posts and pops 25%, BDI is up 300% from the lows. DRYS trading at $4. Given the above what would you sell the March $5 calls for? All I know is that unless I had some inside info there is no way in hell I would be selling them at $0.1, not even for a covered write.
I'm not sure where you're going with this, but they're a buck OTM with 3 days left until expiration...would you BUY them?
I have been buying the April 5's the last couple of days (also far too cheap in my estimation) but will be hedging the position prior to EOD tomorrow at a ratio of 1000 shares short /50 calls.
? Didn't see under 3.7 today, was $4 when I posted. Edit: I guess you mean you were bidding $3.5. Anyway the point is that IV is artificially low and I think I know why. We will see if I am right tomorrow afternoon.
I've been wrong plenty of times before, but I agree with you here. DRYS is probably too cheap or at least the risk/reward ratio would be terrible for selling calls IMO, be it Mar or Apr. Maybe a Call Ratio Backspread might work, but then again, it would be better if DRYS had every dollar options (like CSCO for example) and not just 2.5 strikes. Anyways, be interesting to see what happens come earnings. JJacksET4
Idiot broker told me earnings was today after close, in actual fact no date set yet. Added the april 5 calls again today. Check here for date: http://www.irwebpage.com/dryships/ir.html Added Rimm April 50 Calls today as well.
Stock is up big premarket. Not sure if I will sell part of my position or not. I've been looking at that gap back in late Jan. wondering if a fill was ever possible.
Took profits (perhaps being too aggressive again but looking at over a 100% return and am already overweight commodities), will buy back in after earnings date is announced. Edit: Picked up 80 April 7.5 calls to keep a toe in as the contract announced effectively takes the risk of BK off the table and gives DRYS the cash infusion it needed. From IR "The exact date for the release of fourth quarter and full year 2008 results has not been determined yet. A date is expected to be announced sometime over the next two weeks. A press release will be issued announcing the date of the earnings release and time of conference call prior to the release of earnings. "