Today we got a good bounce back. This market is definitely not for those fai of heart. The last two days have boded well for me as my two top stocks have bounced back. My top three investments are GRMN, ACH and CRDN. CRDN is up 3 bucks over two days, ACH the same and GRMN is up 13!!! It is time to take some off the table because I feel the market will continue downward. Anyways, back to CRDN talk.
I continue to remain bullish on CRDN. It has bottomed and it will continue upward. Today in a conference call CRDN reiterated guidance and covered all facets of their business. They seem to be in more business than I thought. I still believe they will get several MRAP II orders, which we will hear about by December. I also feel that they have an increased short float due to the previously falling share price. This means we could see a huge jump on any good news. Currently, my call options (5 Jun 08 50's) are close to the strike price (closed at 46). After we break 50, every movement of 1.00 in share price means $500 for me. I will be looking to sell 5 June 08 80's at $3.00 or better to get some cash in hand. This will complete my spread and then I can sit and wait for paydirt.
Tuesday, November 27, 2007
Tuesday, November 20, 2007
have stocks bottomed? strategies forwardlooking
ok, does the market suck or what? I mean we are all getting hammered here. However, I have an idea that will bring money to the bank by next June. I'm going to be placing a bull credit spread on CRDN.
First of all, a little insight into spreads. Spreads can be horizontal or vertical. Horizontal means you buy / sell at the same strike price, different months. Vertical means you buy / sell at different strike prices on the same month. I think CRDN is grossly undervalued right now. At $43, it is victim to short sellers. The company reported good numbers, which fell below expectations due to one time taxes.
I have previously asserted my stance on CRDN, I think it can hit $100 after it receives MRAP II orders. However, at $43, it is trading at 8 times forward earnings. Either somebody knows something or it is just getting beaten up. I'd like to propose buying 10 June 50's and selling 10 June 80's. I'm not sure if you have to buy and sell at the same time. What I would prefer to do is buy 10 here (costing 5000) and sell 10 when CRDN goes up a little bit. That way I would lower my initial cost. Anyways, lets get to the point.
Lets say I buy 10 June 50's for $5.00 a contract. I wait two weeks CRDN recovers a little. I could just sell these, and make a profit, but I am long CRDN. I want to sell 10 June 80's. I sell them for $2.00 a contract. I know have an initial investment of $3000. Three different outcomes are possible.
The first is CRDN is less than $50 in June. I have limited my loss and will lose all $3000. I'm lucky I'm young because I can recover. The second outcome would be the share price would be between $50 and $80. This would give me some gain as long as the share price would be above 53. I paid 5-2 per contract, so 3 dollars a contract. As long as it's above 53 we are good to go. If the share price is above 80, I have made $30 per contract, with 10 contracts, that's $30000 of a $3000 investment.
Ultimately I would like to buy June 50's now and sell June 80's in a few weeks when I can get the same price. This would also enable me to risk nothing if I can buy and sell at the same price.
With the money, I would use $10k to pay off debt, $10k for a mutual fund and $10k on Ashley. This way everyone is happy. I have also looked into chinese stocks for this play and will keep you posted on any strategies I implement from now on.
First of all, a little insight into spreads. Spreads can be horizontal or vertical. Horizontal means you buy / sell at the same strike price, different months. Vertical means you buy / sell at different strike prices on the same month. I think CRDN is grossly undervalued right now. At $43, it is victim to short sellers. The company reported good numbers, which fell below expectations due to one time taxes.
I have previously asserted my stance on CRDN, I think it can hit $100 after it receives MRAP II orders. However, at $43, it is trading at 8 times forward earnings. Either somebody knows something or it is just getting beaten up. I'd like to propose buying 10 June 50's and selling 10 June 80's. I'm not sure if you have to buy and sell at the same time. What I would prefer to do is buy 10 here (costing 5000) and sell 10 when CRDN goes up a little bit. That way I would lower my initial cost. Anyways, lets get to the point.
Lets say I buy 10 June 50's for $5.00 a contract. I wait two weeks CRDN recovers a little. I could just sell these, and make a profit, but I am long CRDN. I want to sell 10 June 80's. I sell them for $2.00 a contract. I know have an initial investment of $3000. Three different outcomes are possible.
The first is CRDN is less than $50 in June. I have limited my loss and will lose all $3000. I'm lucky I'm young because I can recover. The second outcome would be the share price would be between $50 and $80. This would give me some gain as long as the share price would be above 53. I paid 5-2 per contract, so 3 dollars a contract. As long as it's above 53 we are good to go. If the share price is above 80, I have made $30 per contract, with 10 contracts, that's $30000 of a $3000 investment.
Ultimately I would like to buy June 50's now and sell June 80's in a few weeks when I can get the same price. This would also enable me to risk nothing if I can buy and sell at the same price.
With the money, I would use $10k to pay off debt, $10k for a mutual fund and $10k on Ashley. This way everyone is happy. I have also looked into chinese stocks for this play and will keep you posted on any strategies I implement from now on.
Wednesday, November 7, 2007
3 buys, all options
My portfolio is getting a little messy but it will have to suffice for now. I rebought an EMC call I sold, netting 130. Profits have been taken on EMC the past few days and I rebought in for the next jump up. I also bought 10 out of the money calls for SIRI. SIRI has robustness to break through its recent high as investors foresee approval on the XMSR/SIRI merger.
CRDN has been unfairly brutalized. They reported 'bad earnings' on rising costs, but didn't lower full year guidance. I'd like to buy more but I'm strapped on cash right now.
My last aquisition was purchasing ACHEH, a MAR 40 call for ACH. The chinese stocks go up and down and I'm looking to put some money in my pocket before the bubble bursts. This price is the cheapest its been in 2 months, so I thought opening a position would be a good idea.
CRDN has been unfairly brutalized. They reported 'bad earnings' on rising costs, but didn't lower full year guidance. I'd like to buy more but I'm strapped on cash right now.
My last aquisition was purchasing ACHEH, a MAR 40 call for ACH. The chinese stocks go up and down and I'm looking to put some money in my pocket before the bubble bursts. This price is the cheapest its been in 2 months, so I thought opening a position would be a good idea.
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