$MTCH up 6% for no other reason than that Dave and Tom over at Fool.com suggest this stock as a buy. Glad we beat them to it.
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Glad I was buying on that down 5% day
Picked up BIIB today at $266+. Another super cheap stock.
I saw your comment about those earnings plays. What are your thoughts on SDRL? I’m contemplating putting a small amount at risk that I’m willing to lose 100%. Seems like a firecracker type stock. If they get an extension from their lenders (which I would assume they will given they are still operating at a profit) then I could see it double easily.
No opinion, really. Already exploded through the pocket…not much of a pattern, IV at 150%.
Doesn’t fit the mold I have success with, but doesn’t mean it can’t work.
With volatilty that high, it suggests that everyone has high expectations here. When that is the case, I want to be the one to sell you those options.
Gotcha. I don’t play options so just looking at the stock.
Scary! How do you trade stock over earnings? Easier to have defined risk, no?
My defined risk would be capped by what I’m willing to lose. Let’s say it’s a 1-2% position that I’m ok with losing completely (realistically I wouldn’t completely lose it).
So, if you buy an $18 dollar stock, and you were willing to lose $1k, you’d buy 50 shares?
An option question if I may for OA… You bought KMI May options today. 1) If the earnings are on 4/20 why go so far out if youre playing the earning call itself? 2) You bought them before the weekend. Won’t premium be sucked out somewhat vs. buying on Monday for example? 3) Is that because the closer you get to earnings the more expensive the options will be ?
Sorry for the newbiness of the questions. I can wait for AHWOA if its a pain to answer it here. Thanks as always
Bought them yesterday, and not playing the announcement alone…but the residual movement that will follow as well.
Would you think the stock would hit $24 on earnings? Not totally realistic…but how about the next 30 days?
Agree with OA’s analysis. As an accumulator of KMI from just below the convertible debt offering at 31ish down to 14ish (chose not to buy the leg sweep down to 9ish) I am expecting a move to 24 and eventually 29 to 32 assuming no disastrous news and oil and gas keep flowing and need to be stored … and they need to keep being paid for that. Reasonable for this to happen before the end of the year.
I accumulate small and increase the amounts I buy on the way down.
OA posting blogs on Trading Addicts, moving off IBC?
No, I was trying to push content to my Facebook page
Wish I hadn’t already sold. MTCH
Why play for a gain, when you can take a loss?
Ha! I guy I work with always says “Why take something for free when you can pay for it?”
What is your guys upside target on $MTCH? I was originally thinking gap fill up to around $12.50 but I wonder if that is low balling it?
14
Is that the IPO price?
Very entertaining!
What’s entertaining?
Whoops – left a few options comments about earnings plays on the article below this one – didn’t see this was the most recent article. I would say arguably the best earnings bet before a report is a strangle. I can’t say how many times I was absolutely convinced a stock would move in a certain direction after earnings but to be safe I also bet small on the other side and then came out a good winner or a big winner because what I thought couldn’t happen, happened. Repeating what I said on the other blog entry – most recent biggest example was GOOGL this past summer. Thought for sure that although it had been going up big before earnings – it was going to disappoint on earnings. Had the call side on though in addition to the put side to play it safe and hit it big when it skyrocketed after earnings. Another quick example – GRPN this past fall. I was pretty convinced it would go up big after earnings but had small puts in addition to calls to play it safe and did fairly well when it was pummeled. The list could go on. In agreement with what Jeff said – of course – the key is to bet what one might understandably lose completely without really damaging overall capital since of course the stock might not move much at all after earnings. Tied in with the latter point – one of the keys then is selecting to play those equities which have a history of moving big on earnings and/or are set up to possibly move big after their reports.
Strangle is the worst play. Both premiums get crushed. Lowest probability trade out there.
I would respectfully disagree. As someone who has done well playing strangles, I have seen people lose big just playing one side and all they had to do was reduce their bet a little on one side and use the money they took off to play the other side as protection. I could give hundres of examples over the last few years but just quickly – let’s take Disney this past summer. Someone betting one thousand with call options on the long side into earnings would have lost all that money. If he or she had reduced his or her bet to 700 on the call side and then put 300 on the put side – he or she would have walked away with at least 3000 dollars on the put side even though it was not the side he or she thought would win. And of course – he or she would have still won if they had been correct on the long side.
Or take NFLX tonight. How many people will just choose to play one side but yet they will say “I just know this will move big one way or the other?” Okay – well then if they just know it is going to move big one way or the other – they should arguably have a bigger bet on the direction they think it will go but a smaller bet on the other direction so if it does move big – they will win no matter what.
For the record though – I agree with you that for almost every equity out there – they will not move enough to justify playing both sides. I am referring to ones with a history of big liquid movement after earnings. In the end – a better play is probably to wait until after earnings, see the intraday direction, and then load with puts or calls in that direction for a quick in and out play.
So you are cherry picking examples to fit your thesis. Math suggests this is the worst trade in the book.
The majority of the time, the expected move is priced in to perfection prior to the outcome. If the stock moves as much as expected, less than expected, or only slightly more than expected, you lose twice. You have to get lucky to make money. Horrible strategy.
Looks a little late to buy now. It will come back a few bucks. I don’t like such thinly traded stocks but others here don’t mind.
And I should add – have read your blogs for years – great calls – especially liked the call to load up on X calls a few summers ago. I agreed and was loaded to the gills and held through its great report that summer.
Congrats guys on a big week…might be a bit choppy this week but expect more of the same.
TSLA looks like its going to challenge 275 this week…get some.
I like AGN on the downgrade and FCX in the low 10’s.
GRPN about to rip
Bought SEDG. Tight wedge and tight range for nice risk/reward buy.
I picked up some June KMI 20 calls this morning – was hoping to get a better price this morning with the drop in oil, but it started rallying quicker than I expected.
Conference call for KMI earning is Wednesday after the close.
OA..Helene Miesler, technician at Real Money, wrote a piece over the weekend using the sentiment chart you have been referring to over the past year, believes we are in the Anxiety phase. FYI
I do too. Interesting she used that for a write up.
I know you do.
Anyone looking at ANIK? Thinly traded but good looking chart and growth
Looks a little late to buy now. It will come back a few bucks. I don’t like such thinly traded stocks but others here don’t mind.