Recordings
Paul
I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
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I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
Hello Virginia,
I am unable to view your attachment. Can you please retransmit.
Thank you.
Susan T.
On Wed, Oct 17, 2012 at 10:27 PM, Virginia K <4gigizmail@gmail.com> wrote:
Paul
I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
Hi Virginia,
Sorry it is taking us a little time to get the recordings posted, the COOL_Club Crew has been busy! But fear not they will get posted. The October sessions have all been general topics and so they will be fresh whenever they are posted.
Like Susan I could not see your trades on my PC but could on the iPad. Through the magic of technology I have reproduced and posted again below so that hopefully all can see it.
First the good news, three of your options look to me like they are on a course to just expire worthless on October 20th (essentially tomorrow). Your DIS Call at 52.50 strike, MELI Put at 85 strike and ORLY Call at 85 strike all have Oct 20 (Saturday) expirations and are all out of the money by a fair amount. These are often the conditions when options expire worthless. Of course, to be sure to avoid any chance of a big move today or tomorrow you could do a Buy-To-Close. Whether you want to capture your gains now or take the chance things will change dramatically by tomorrow will depend on your personal level of anxiety about your position.
Your ALGN PUT is another story. In this case ALGN earnings came out last night and the stock dropped significantly in the after hours. At this juncture it would appear that ALGN will be put to you and your cost basis will be the $35 strike less the premium collected which appears to be $1.10. Your net buy price will be something like $33.90 or so (commissions may make it a little higher). This will be a price that will be above the current price. If the market just overreacted, in fairly short order you could be in a position to be selling calls against this stock.
Your ALGN PUT is a classic example of why it is not recommended to sell options whose expiration is after earnings (this was last night's COOL_Club topic). Fortunately you got to learn this lesson virtually, where I have had to learn it several times with real money (ouch).
Hope this helps,
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
Sorry it is taking us a little time to get the recordings posted, the COOL_Club Crew has been busy! But fear not they will get posted. The October sessions have all been general topics and so they will be fresh whenever they are posted.
Like Susan I could not see your trades on my PC but could on the iPad. Through the magic of technology I have reproduced and posted again below so that hopefully all can see it.
First the good news, three of your options look to me like they are on a course to just expire worthless on October 20th (essentially tomorrow). Your DIS Call at 52.50 strike, MELI Put at 85 strike and ORLY Call at 85 strike all have Oct 20 (Saturday) expirations and are all out of the money by a fair amount. These are often the conditions when options expire worthless. Of course, to be sure to avoid any chance of a big move today or tomorrow you could do a Buy-To-Close. Whether you want to capture your gains now or take the chance things will change dramatically by tomorrow will depend on your personal level of anxiety about your position.
Your ALGN PUT is another story. In this case ALGN earnings came out last night and the stock dropped significantly in the after hours. At this juncture it would appear that ALGN will be put to you and your cost basis will be the $35 strike less the premium collected which appears to be $1.10. Your net buy price will be something like $33.90 or so (commissions may make it a little higher). This will be a price that will be above the current price. If the market just overreacted, in fairly short order you could be in a position to be selling calls against this stock.
Your ALGN PUT is a classic example of why it is not recommended to sell options whose expiration is after earnings (this was last night's COOL_Club topic). Fortunately you got to learn this lesson virtually, where I have had to learn it several times with real money (ouch).
Hope this helps,
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
On Wed, Oct 17, 2012 at 9:27 PM, Virginia K <4gigizmail@gmail.com> wrote:
Paul
I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
Paul,
I am a believer! How did you arrange that ALGN object lesson for us? ALGN was my 2nd VT, I do not follow ALGN but it was discussed at Cool Club and the ALGN Oct12 Puts at $34 and $35 looked good…so as you say I’ll, hopefully, be able to start selling calls on them soon. So my question, was this a bolt out of the blue or was there indications ahead of time that there would be problems with the earnings report?
Bob
From: cool_club@bivio.com [mailto:cool_club@bivio.com] On Behalf Of Paul Madison
Sent: Thursday, October 18, 2012 7:18 AM
To: cool_club@bivio.com
Subject: Re: [cool_club] Recordings
Hi Virginia,
Sorry it is taking us a little time to get the recordings posted, the COOL_Club Crew has been busy! But fear not they will get posted. The October sessions have all been general topics and so they will be fresh whenever they are posted.
Like Susan I could not see your trades on my PC but could on the iPad. Through the magic of technology I have reproduced and posted again below so that hopefully all can see it.
First the good news, three of your options look to me like they are on a course to just expire worthless on October 20th (essentially tomorrow). Your DIS Call at 52.50 strike, MELI Put at 85 strike and ORLY Call at 85 strike all have Oct 20 (Saturday) expirations and are all out of the money by a fair amount. These are often the conditions when options expire worthless. Of course, to be sure to avoid any chance of a big move today or tomorrow you could do a Buy-To-Close. Whether you want to capture your gains now or take the chance things will change dramatically by tomorrow will depend on your personal level of anxiety about your position.
Your ALGN PUT is another story. In this case ALGN earnings came out last night and the stock dropped significantly in the after hours. At this juncture it would appear that ALGN will be put to you and your cost basis will be the $35 strike less the premium collected which appears to be $1.10. Your net buy price will be something like $33.90 or so (commissions may make it a little higher). This will be a price that will be above the current price. If the market just overreacted, in fairly short order you could be in a position to be selling calls against this stock.
Your ALGN PUT is a classic example of why it is not recommended to sell options whose expiration is after earnings (this was last night's COOL_Club topic). Fortunately you got to learn this lesson virtually, where I have had to learn it several times with real money (ouch).
Hope this helps,
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
On Wed, Oct 17, 2012 at 9:27 PM, Virginia K <4gigizmail@gmail.com> wrote:
Paul
I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
Bob,
Quite honestly it was a pretty easy lesson to setup.
Small caps are thinly traded and thus move big on news. I have not had time to fully digest ALGN's earnings but what I saw quickly was that they only missed the analysts' estimate by a penny but they offered a forecast on the 4th quarter that was 7 or 8 cents below the analysts' estimate. I imagine it is that forecast that got everybody "worried". In certain cases, company management will try to "manage" expectations so that they have a fairly easy "bogey" to shoot at. In sports that is called sandbagging. I do not know that that is what is going on here but perhaps it is. That is a speculation each investor has to make for themselves.
I encourage people to go look at price charts on small cap companies that you know. You will often see pretty strong moves in one direction or the other on the earnings release. Bigcharts.com is one place that you can create a chart with a symbol on the graph for each time earnings have come out.
This is all a reminder of exactly why selling options (especially puts) that expire after earnings can be a very humbling experience. As I discussed last night, we are much better off selling PUTs now that we're past earnings and may be dealing with an over-reaction. If we are right and it is not justified, there is a good chance the stock value might recover after a little bit of time.
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
Quite honestly it was a pretty easy lesson to setup.
Small caps are thinly traded and thus move big on news. I have not had time to fully digest ALGN's earnings but what I saw quickly was that they only missed the analysts' estimate by a penny but they offered a forecast on the 4th quarter that was 7 or 8 cents below the analysts' estimate. I imagine it is that forecast that got everybody "worried". In certain cases, company management will try to "manage" expectations so that they have a fairly easy "bogey" to shoot at. In sports that is called sandbagging. I do not know that that is what is going on here but perhaps it is. That is a speculation each investor has to make for themselves.
I encourage people to go look at price charts on small cap companies that you know. You will often see pretty strong moves in one direction or the other on the earnings release. Bigcharts.com is one place that you can create a chart with a symbol on the graph for each time earnings have come out.
This is all a reminder of exactly why selling options (especially puts) that expire after earnings can be a very humbling experience. As I discussed last night, we are much better off selling PUTs now that we're past earnings and may be dealing with an over-reaction. If we are right and it is not justified, there is a good chance the stock value might recover after a little bit of time.
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
On Thu, Oct 18, 2012 at 10:36 AM, Robert Hays <eaglehaven@wavecable.com> wrote:
Paul,
I am a believer! How did you arrange that ALGN object lesson for us? ALGN was my 2nd VT, I do not follow ALGN but it was discussed at Cool Club and the ALGN Oct12 Puts at $34 and $35 looked good...so as you say I'll, hopefully, be able to start selling calls on them soon. So my question, was this a bolt out of the blue or was there indications ahead of time that there would be problems with the earnings report?
Bob
From: cool_club@bivio.com [mailto:cool_club@bivio.com] On Behalf Of Paul Madison
Sent: Thursday, October 18, 2012 7:18 AM
To: cool_club@bivio.com
Subject: Re: [cool_club] Recordings
Hi Virginia,
Sorry it is taking us a little time to get the recordings posted, the COOL_Club Crew has been busy! But fear not they will get posted. The October sessions have all been general topics and so they will be fresh whenever they are posted.
Like Susan I could not see your trades on my PC but could on the iPad. Through the magic of technology I have reproduced and posted again below so that hopefully all can see it.
First the good news, three of your options look to me like they are on a course to just expire worthless on October 20th (essentially tomorrow). Your DIS Call at 52.50 strike, MELI Put at 85 strike and ORLY Call at 85 strike all have Oct 20 (Saturday) expirations and are all out of the money by a fair amount. These are often the conditions when options expire worthless. Of course, to be sure to avoid any chance of a big move today or tomorrow you could do a Buy-To-Close. Whether you want to capture your gains now or take the chance things will change dramatically by tomorrow will depend on your personal level of anxiety about your position.
Your ALGN PUT is another story. In this case ALGN earnings came out last night and the stock dropped significantly in the after hours. At this juncture it would appear that ALGN will be put to you and your cost basis will be the $35 strike less the premium collected which appears to be $1.10. Your net buy price will be something like $33.90 or so (commissions may make it a little higher). This will be a price that will be above the current price. If the market just overreacted, in fairly short order you could be in a position to be selling calls against this stock.
Your ALGN PUT is a classic example of why it is not recommended to sell options whose expiration is after earnings (this was last night's COOL_Club topic). Fortunately you got to learn this lesson virtually, where I have had to learn it several times with real money (ouch).
Hope this helps,
Paul Madison
TheCOOLClubDude@gmail.com
www.bivio.com/COOL_Club
On Wed, Oct 17, 2012 at 9:27 PM, Virginia K <4gigizmail@gmail.com> wrote:
Paul
I have missed all the Oct meetings, and keep checking to view the recordings .Paul, I appreciate all the excellent teaching and have made some trades in the virtual account. Not sure what to do with them now though, see below.
I am really far behind the group now, and was wondering when the Oct meeting recordings would be viewable? Thanks for all you do.
Virginia
