Alan – We open here a forum for discussing options. It might be helpful to open the discussion with a copy of the paragraphs that I wrote 4/24 about options. I don’t know how to cut-and-paste that material.
Before I opened this discussion forum, I noticed a question about choosing a stock that might perform well as an option. I’ve already briefly addressed the subject…and would appreciate knowing about the thinking of others.
I have years of experience, but could not pass myself off as an ”expert.” I prefer that this discussion forum be a gathering of investors with an interest in options…with all of those with greater experience contributing things that they have learned. Our goal is to benefit one another.
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
$ETSY n p – NASDAQ) Follow-Up: Etsy Creates 130% in 2 Days for Sharp Trader http://www.bottarelliresearch.com/trades/2016/08/01/follow-up-etsy-creates-130-2-days-sharp-trader Ben
Bank of America is Handing You a Short
Bank of America (BAC – NYSE)
by Bottarelli Research
Tuesday, August 02, 2016
Fear is in the wind this morning where certain big banks are concerned. Yesterday, KBW’s Frederick Cannon and Allyson Boyd spoke about the dangers poised by a new Glass-Steagall bank bill:
Investors should not view the reinstatement of Glass-Steagall as a potential way to unleash value in large banks, however. A Congressional approach to breaking up the banks would not be based on economic value creation, but be based on the politics of applying penalties to the largest banks. Therefore it is difficult to develop a positive view on potential regulations for the shares of the largest banks, specifically JPMorgan Chase, Bank of America and Citigroup…
Today we heard from Bank of America BAC – NYSE that “its results could be adversely affected if Britain’s exit from the European Union limits the ability of its U.K. units to conduct business in Europe.”…
http://www.bottarelliresearch.com/charts/2016/08/02/bank-america-handing-short image http://images.bottarelliresearch.com/charts/20160802-bank-america-handing-short/BAC-080216.png ~~ #BeenBeingBen
Is $TWTR Crying Wolf or Taking Flight? Twitter (TWTR – NYSE)
by Bottarelli Research
Thursday, August 04, 2016
Perhaps no stock in the market has tantalized investors over the past few years quite like Twitter TWTR – NYSE. Despite hundreds of millions of loyal users, the social media company hasn’t been unable to monetize this valuable legion. The stock, to put it lightly, has felt the effects.
Now after missing earnings again last week, TWTR fell 14.6%. But just when traders left it for dead, shares quickly rebounded and already closed the earnings gap — a strong signal of a meaningful bottom. This enticed a sharp trader to buy 15,000 TWTR December 20/27 bull call spreads for $1.20 apiece earlier today. #Chart/Image: http://images.bottarelliresearch.com/trades/20160804-twtr-crying-wolf-taking-flight/TWTR.png Article: http://www.bottarelliresearch.com/trades/2016/08/04/twtr-crying-wolf-taking-flight Best2ALL ~ BenJammin’
$BMY Free-Fall is a Prescription for Patience
Bristol-Myers Squibb BMY – NYSE tanked this morning following a failed trial for its cancer drug Opdivo. It’s not unusual for a pharmaceutical company to drop 15% in a single session due to disappointing drug results, but BMY isn’t just a flash-in-the-pan stock with a couple drugs in the pipeline. Prior to today’s open, it sported a market cap north of $125 billion.
But where some see misfortune, sharp traders tend to see opportunity, and someone with deep pockets and plenty of time is buying this free-fall. Earlier today this customer picked up 5,000 BMY 70 strike calls that expire in January of 2018. http://images.bottarelliresearch.com/trades/20160805-bmy-free-fall-prescription-patience/BMYaug5.png Source: http://www.bottarelliresearch.com/trades/2016/08/05/bmy-free-fall-prescription-patience Best2You ~ BenJammin’
#CELG via Tipranks.com – Analyst Eric Schmidt from Cowen & Co. reiterated a Buy rating on Celgene (CELG), with a $150 price target.
Article > Eric SchmidtEric Schmidt Cowen & Co.
4.9 stars Analyst Analyst Out of Five Stars
Average Return: +24.2% per rating
Success rate: 57% (88 out of 154)
Celgene Corporation (CELG) Remains Top Pick at Cowen Following Meeting with Management
August 8, 2016
Schmidt reiterates a Buy rating with a price target of $150, marking a nearly 30% increase from where the stock is currently trading…
BenzingaPro @BenzingaPro 3h3 hours ago
$CELG Option Alert: CELG Sep16 120 Calls Sweep: 1195 @ ASK $1.50: 6081 traded vs 4707 OI: $113.24 Ref
$LYB – LYB Attracts Another Infusion
LyondellBasell Industries (LYB – NYSE)
by Bottarelli Research
Monday, August 08, 2016
http://www.bottarelliresearch.com/trades/2016/08/08/lyb-attracts-another-infusion Chart: http://images.bottarelliresearch.com/trades/20160808-lyb-attracts-another-infusion/LYB.png
$PANW – Palo Alto Networks Collects its Largest Options Position
Palo Alto Networks (PANW – NYSE) by Bottarelli Research
Tuesday, August 09, 2016: Article and Chart http://www.bottarelliresearch.com/trades/2016/08/09/palo-alto-networks-collects-largest-options-position (image):
http://images.bottarelliresearch.com/trades/20160809-palo-alto-networks-collects-largest-options-position/PANWaug9.png
I wonder if anyone could answer a very basic question about option expiration. A few weeks ago I sold 4 ARWR calls with a strike price of $7 which were due to expire yesterday. Typically ARWR then put in an unexpected sprint up which means that the calls were in the money all day yesterday by around $0.50. I have been expecting to be assigned but have heard nothing from my brokers Interactive Brokers. I know the holder has to exercise by 4.30pm on the expiration date but does anyone know if there’s a time-scale for IB letting the writer know. I know that I can ask IB or wait until Monday to see if the shares are no longer in my account but I thought there might be some others on here who might find it useful to know this. Thanks.
Normally if the option is at least one cent over strike price in your case the underlying stock is assigned. If the counter party,,, the one who bought your calls,, instructs to not exercise they would not be. You have no way of knowing, sometimes for a day or even two, to see if the stock was assigned. You should be notified before the market reopens. It would be a rare event to not be assigned. imo
Thanks Frank, I’ve now received notification of assignment and my shares have been removed from my account.
It feels like Buy/Write has been my most successful strategy this year so I submit to you this one:
Buy $ ESPR @ $9.65
Sell Call 16Dec $10 @ $0.92
Max gain 13% (6 wks)
Downside protected to $8.73
Hoping it goes back to $100
Is This the Next Semiconductor Company to Get Bought?
TTM Technologies (TTMI – NASDAQ) http://www.bottarelliresearch.com/trades/2016/12/12/next-semiconductor-company-bought
http://images.bottarelliresearch.com/trades/20161212-next-semiconductor-company-bought/TTMIdec12.png
No position, free subscription
$FIS np – FIS Attracts Unusual Call Buying
Fidelity National Information Services (FIS – NYSE)
http://www.bottarelliresearch.com/trades/2016/12/15/fis-attracts-unusual-call-buying
Shorting info from Armstrong Economics….
MYTH: Short-selling causes panic declines.
Throughout history, whenever the stock market crashes, the majority blame short positions for causing the panic. This has been the root cause of government investigations during every panic.
Reality: A short position in stocks is created by borrowing stock and then selling it on the market. Therefore, every short position actually results in a long position. The first is the long position from whom the short borrows; the second is the long position created by the person who bought the stock from the short seller. So at any given time, short positions are outnumbered 2:1 in share markets, assuming that 100% of all outstanding stock was originally borrowed.
In reality, short positions typically only account for a small percentage of total outstanding positions. Therefore, it is impossible for short positions to outnumber long positions. This only becomes possible in the instance of unlimited naked short selling, but that has never happened.
In futures, two players must balance every contract: one long and one short. Therefore, in commodities short positions can (at best) only match long positions. Even during the most bearish moments, short positions will never outnumber long positions.
Hi. This may not be the relevant forum to post so please direct me if it isn’t. Is anyone familiar with the Market Data subscription types? I am using IB and subscribed to the “US Value Bundle” as I don’t do day trading but I cannot find any explanation of what is actually included in the package. Quotes show as “delayed” in the TWS app and book trader does not work. Any help or link to a page with explanation would be much appreciated. Thanks.
Hi: Its as good a place to ask as anywhere. Delayed simply means what it says….the market data youre seeing is delayed by ~15mins. But Id suggest you call IB as they are infinitely knowledgable and v helpful….theyll guide you better than anyone here.
Thanks. I thought the with the “value” data you get real-time prices but it doesn’t appear so. Will need to find out what is the difference between the “value” and “free” market data packages they offer as atm I don’t see any. Couldn’t justified paying $30/mth for market data when I don’t do day trading.
$BIOC I’m sure that this is a question with a very obvious answer so apologies in advance. As expected , I have just been assigned at expiry of the March 2.5 BIOC puts which I sold last September. I sold 10 puts but just after that there was a 3 to 1 reverse split and so I have now been assigned not 1000 shares as originally expected but 340. My question is will the total price which I have paid for the shares have been calculated based on the number of shares actually assigned (340) or on the number of shares which I originally contracted to buy (1000)? Thanks, Cyndy
Can now answer my own question – I was obliged to pay for 1000 shares at the strike price , for which I received 340 shares in return.
Here’s a question. Suppose I buy calls in company $XXXX, currently trading at $5, with a distant strike date and a strike price of, say, $12. I’m confident it will be at $40 in three years, and therefore anticipate great riches. But then the company is unexpectedly bought out for $20 a share. Presumably the options cease to exist in any meaningful way after the buy-out is complete. How long would I normally have between the announcement and and the completion to either sell the calls, or scrape together the cash to exercise them?
Sales of companies generally take many months, though it can sometimes happen in a month or less with very small companies (though those generally don’t have options trading).
$X np – Sharp Paper is Ramping Up on Steel Stocks
http://www.bottarelliresearch.com/free/2017/06/28/sharp-paper-ramping-up-steel-stocks
$GPS – Has GPS Bottomed? Gap (GPS – NYSE)
http://www.bottarelliresearch.com/link?l=fbf22e4f5d1811e78a94782bcb63083c&u=5184976c5d1911e78a94782bcb63083c
$MU – This Earnings Dip is Too Good to Pass Up
Micron Technology (MU – NASDAQ)
http://www.bottarelliresearch.com/link?l=ab50aeb35de711e78a94782bcb63083c&u=ffcb322a5de711e78a94782bcb63083c
$INTC – Is INTC About to Snap the Downtrend?
Intel INTC – NASDAQ
http://www.bottarelliresearch.com/free/2017/07/05/intc-snap-downtrend
$ABEO – http://www.bottarelliresearch.com/free/2017/08/15/small-biotech-primed-30-pop