My option trades

That's the problem with the WTW trade. By thinking about spreads you are making a pig of yourself.

 

Let's test another hig beta strangle....this time I'm using ACOM Feb 27.5 put and 30 call. I bought 2 contracts of the strangle for -379.90.

I like the upside, but say the market's reversal today holds and tomorrow the market trends down again.....A slight miss on ACOM would push it back to $24.50. A beat here and we should see $33-$34 tested by Friday if not tomorrow. We can't possibly have two bizzarre announcements by two different companies right? I think ACOM would clearly breakthrough the top, but this would be a great place to test the strangle again on a high beta mover (ACOM's past 4 reports are +10% mover with high of +43% pop).

 

Still not getting your point. It seems like you're saying I should have just watched it from the sideline??? Yea maybe, MAYBE I SHOULD HAVE WATCHED NFLX, GMCR, RAX, AND FOSL ALL FROM THE SIDELINE TOO....HECK CAN'T LOSING MONEY BY WATCHING THEM ON THE SIDELINE....

 

Yeah, definitely not saying it won't drop below $72, but just mentioning that odds of falling below $72 in the next 4-5 weeks is very low, maybe no more than 20% percent chance, and that's if we get a broad market correction of 10% or more.

My point was they played this card now to hold the shares at this $72-$83 level for at least a few more weeks. The odds were had this not been done now, the shares would have clearly tanked to $70 if not in the $67-$68 range that we saw in yesterday's AH. There was panic selling right away, but we can speculate that management knew that would happen, and so they added this adding more risk to the company by using credit facilities. My question if you can answer it would be what other motivation did management have to hold the shares here at $72 for another few weeks????

 

No idea, other than fiduciary. I am sure the board of this turd want to unload as much stock as they can. Watch the insider sales data.

 

Same here, I felt that too after putting up some crap like that using credit to buy back shares when the company's guidance are not strong....I clearly felt the puts were going to get paid off on the strangle play, until that crap crossed the line...But that's the wild card in these plays.

 

I was trying to come up with as many puns as I could for WTW Weight Watchers International.

 

My guess is that they unloaded a yearly high (notional) in the last few days. I have no idea as to their individual restrictions. This stock is the GRPN of their sector. It looks like a fantastic short, but I can't replicate it cheaply in vol so I have little interest in the ticker.

 

Now, this strangle looks much better....ACOM is at -5% AH, and the past 4 quarters the shares have gone at least 5% in the same direction throughout the following day. I like the odds on this trade, I think we see at least $25 if not lower at some point tomorrow.

 

I see it the point now lol....yeah, this one's a wild card one....I bought 200 shares on that 40% earning trade run up last year, which is why I came back to it this time around. I was all stock so I actually held onto it through the post earnings day too before dumping, but putting about $9000 in risk on such a trade is much to risky considering the fact that I could have gotten nearly the same result with $400 in initial risk. I'm all options on these earning trades now.