ESLR Follow up #2

Looks like I traded out on time yesterday. ESLR announced and although the numbers looked better than first quarter, less bad didn't work for them this time.

I am looking at a covered call set-up for Dec 2.50. could pay for christmas itself. I see ESLR trading in a tight range between 2 and 2.25 or so until the numbers get better.

Happy trading...

High Frequency Trading

The new buzz on wall-street. Here is a great explanation if you are interested.

http://www.greenfaucet.com/economy/demystifying-high-frequency-trading/77528

Closed ESLR Today

I received a report on the largest short holdings yesterday and of course ESLR was on it with a 35% increase in shorted shares. That coupled with its earnings report tomorrow and a current 15% return (75% annualized) I sold the current ESLR shares for a small profit (%3, 36% annualized) and bought to close out the Sept 2.50 PUTS for a 62.5% return.

Happy Trading...

BIEL Update!

I can't complain taking profits, BIEL settled down to my sell price so I am a little relieved. This morning it shot right to .095 and if you look at the graph, those with more time on their hands than I made a ton of money! It then got traded most of the day and settled just over .06. (The after hour spike is a fluke in OTC stocks, it is not over .08 in the AH)

So what do we learn from this? Almost a perfect text-book "buy the rumor sell the news play."

The press has been hyping this thing (not necessarily wrongly), blogs and discussion groups have been throwing around the FDA approvals (The belief was the company would announce at the CC or before) like they were a sure thing and due out today and the company press about its product is great. All these things tied together cause us humans to become very greedy and in an attempt to make a quick buck radically buy a stock up without any real understanding of what they are doing. Those that are fammiliar with this trend can fairly easily take advantage of this and buy on the way up and sell just before the news. The hard part is in the timing, I could have held and attempted to get out at what I thought would have been the peak, however I too probably would have got caught up in the "It's going to hit a dollar today" psychology.

So the Shark Food for today is to see the buy the rumor and sell the news trend with some trading discipline thrown in to round out the meal. How many of your bank accounts return over 100%?

Now, I will attempt to keep my shark sense on this because this company has great potential for all the reasons people are touting. The hard part is taking an investor verses a traders mind set and buying some for the long run. Not ready to do this at this price, if it pulls back below .05 I'll start buying some for an investment purpose. The only other "speculative investment" I own is Cord Blood America (CBAI). For the same reason, I like the CEO, I like the business plan and they have a tangible product...

Happy trading!

BioElectronics

144% profit last Friday. sold the rumor, didn't wait for the news! although it was up another 25% today.

Can't complain about another double this year!

Happy Trading.

ESLR Follow up

Again, profitable on both sides of the trade. The 2.50s got put to me as planned. ESLR touched 2.43 today, and currently I have a 2.25 cost basis. My Sept 2.50 puts are donw to .45 from the .80 I sold them at.

Two options now. Buy back the 2.50 Sept puts at .40-.45 my cost basis then drops to 1.75.

Hold and wait for September as planned then wait for the ride up towards the latter part of the year.

The largest risk right now is Jul 30 4pm earnings. Yes, this Friday! Could ESLR be in the earnings trend, being bought up based on some expectation? or because SPWR beat tremendously.

I'll watch it Friday. If it continues its trend up I may close it out Friday close to the bell to be safe.

You don't go broke taking a profit!

Here is the chart of ESLR... A couple of solid trading ranges, which is great for us option types.

Sep - Sep trading in a $10 channel with a hump. Now a solid 2-2.40 channel. This coupled with some volitility is great for selling puts! This worked great for Accuray (ARAY) in the $5 range, then earnings were good and reduced the volitility. Also, you can see we have trading interest down at the $2 range, look at the volume. Plus some good upgrades and recommendations to finish it off.

Happy trading.

Follow up to the Diamonds (DIA)

Totally Profitable, enough said!

There was some significant 80 and 92 strike put spreads (Aug-Dec) brought last week on the SPY the S&P 500 ETF. By significant I mean 100's of thousands of contracts. A pretty bearish bet over the next 4-months. I think the fundamentals obviously point to a pullback at some point, we are overbought and touching the top band of the bollingers on the $INDU.

The timing is key now. For the Diamonds some Aug 88 puts might be good. Spread it out and pick up some Sept 85's as well.

Happy trading...

Diamonds and Returns

Ok, I have been talking to my local group of investors about buying some 81/82 or 83 strike calls on the diamonds (DIA) since Friday. As we were going into earning seasons there were several reasons to believe that earnings were going to beat estimates and expect a short upward run.

Some of the reasons:

Estimates were soft.
Cost cutting was raising balance sheets. (Not actually increase in margins and sales)
Enough of a PSYOP campaing when Alcoa (AA) announced a shortfall in expectations and guidance.
The market doesn't makes sense.
Upgrades on Goldman Sachs
Revised unemployment numbers
etc. etc. etc...

Any of those strike prices bought on Friday are up well over a %100. I just got back from a business trip and have been slowly watching the DOW rise while my mobile trading platform is stuck in upgrade mode. No I can't complain to anyone, much, since it is a free third-party platform for TDAmeritrade and I don't like AMTDW.COM wireless for time sensitive trades and its lack of insight into charts and volume.

So now I feel like I did the week of 9 March 2009 when I was on vacation and had cash tied up in puts, which wasn't a bad thing in a bull-run (bear rally market) but certainly not a 2.50ish FAS or 1ish UYG trade, or any of the banks for that matter. Yes, I had planned on buying FAS that Monday morning but was busy waiting in line for an airplane and trying to close some of those puts to free up some cash.

Anyway. So the data is out, GE, C and BAC report tomorrow, does it matter, C is owned by the government, A shot that GE should be worth $2 and BAC has its own MOU rumors. So if their earnings are bad does it matter and how will it affect the market.

With IBM and GOOG reporting good earnings it wasn't enough yet for the market to gurantee a rally, futures are down at this moment. Anticipation on C, GE and BAC are holding them back.

If they do report well and more importantly guide well, I would be buying the 85$ DIA July calls around 10 am with a TS €or limit of your choice. If they are bad would be buying August 83/82 or 81 DIA calls and taking advantage of the added time benefit and pullback that is academic in this traders market.

Let's see what happens... Yes, I am expecting to get my first half of my ESLR shares tomorrow!

Happy Trading.

First Shark Sense Trade Review

I am a fan of Solar stocks especially when they are around the $2 mark. This could be because I missed the SOLR, SOL, YGE etc... rally. However, when ESLR got an upgrade and a $5 price target my shark senses were perked. I had to investigate a smart way to get into ESLR. Especially since the target price would score a double... So I know you don't know me yet but I am an options trader and when I want to buy a stock for a long holding, especially a speculative one I look at selling PUTS to take advantage of the market environment and pressure on the stock to pick up the stock at a reduced price. Now with ESLR I SOLD July 2.50 puts and September 2.50 puts today. I should either keep $2100 dollars if ESLR is above 2.50 next Friday and in Sept or start picking up my long shares for under $2 courtesy of the premiums and volitility. .55 for July and .80 for September... 20 contracts each. Here is an article from Schaeffer's research, I like it because it's bullish with a realistic warning that there is always potential for selling pressure. Downside risk, the stocks' 52-week low was a buck and with the premiums I received is well worth any risk of touching lows as this is a long play.

Now if Solar would break away from its Oil correlation that would be great. We still need to pursue alternative energy!

http://www.schaeffersresearch.com/commentary/content/optimism+approaches+peak+levels+on+evergreen+solar+inc/trading_floor_blog.aspx?ID=93964