Archive for the ‘Stock Options’ Category

Another Shot at Suntech Power Earnings Play on 20th Nov

November 18, 2006

Shares of Suntech Power (NYSE:STP) dropped almost 10% on 16th Novemeber – 2 days before options expiration. It fell from $28.50 to $26 on no news. Read somewhere it may be due to something known as pinning or whatever that is related to options expiring. Not too sure about the mechanics but I seen it happened many times before so I am sort of a believer now.

Looking to buy some STP DEC 25 call options to play the earnings on 20 Nov. Have to buy the DEC options because the NOV options expires today!

I have always been a great fan of this stock. I reiterate that Suntech Power is the best solar stock in the market.

The following reasons sums up why I think STP is a great long term play.

1. Leader in Solar and Solar is the way to go for alternative energy.

2. Low cost manufacturing in China.

3. Locked in long term supply for polysilicon – a key raw material – with major suppliers like MEMC.

4. Finally and most importantly, demonstrated consistent quarter over quarter revenue and earnings growth.

So I bought some DEC 25 calls on Friday for $3.10 a piece when shares were trading for $27 each. Gotten pricey due to a last minute upgrade by Thomas Wiesel. Shares were up to $27.88 in the afterhours trading – almost to where it was 2 days ago.

Update: Sunpower (SPWR) just acquired Powerlight – a major solar systems provider in America. Perhaps this is the reason for STP’s recent decline. On the other hand, SPWR getting stronger and more promising now. Maybe good to buy some when they hit the low 30s.

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Early Exit for OXPS Iron Butterfly

November 15, 2006

Two weeks ago, I entered an iron butterfly spread on OptionsXpress (OXPS) with the middle strike at $30. As of yesterday, I thought the best I could muster will be to breakeven on this one coz OXPS was trading at $28 and only a few trading days remain before the November options expire.

Today, the entire market surged due to some comments made by the Fed Officials, according to the Associated Press. Well, I have no idea what they said – and neither do I care actually – but the surge brought OXPS to $29.50 in the afterhours trading.

So tomorrow, I am going to take this opportunity to exit this otherwise losing trade with a profit. Hopefully, OXPS opens at $30. I am not going to hold this till expiry even though its just a few more days because I think the rally may be sustainable and push the price over $31.50 and turn my iron butterfly into a losing trade again! So, nope! Not taking any more chances here!

OptionsXpress (OXPS) NOV $30 Iron Butterfly Options

November 2, 2006

Shares of OptionsXpress (NASD: OXPS) appears to be trading at the $30 resistance level. Both the November at-the-money calls and puts are currently $0.80 a piece.

With less than 10 trading days to go before options expiry, the time decay on these options is at its highest now.

Going to enter an iron butterfly spread with strikes at 27.5 – 30 – 32.5

Wish me luck!!

I love Dreamworks Animations!

November 2, 2006

Gotta celebrate today! Dreamworks shares rose more than 10% to $28.31 after announcing surprise earnings.

My NOV 25 call options rose from $1.2 to $3.2, bagging a 167% return on my investment! Time to buy some Dreamwork DVDs! 🙂

Next quarter’s earnings should be good too, with Flushed Away and Over the Hedge DVD sales to boost earnings.

Part of the reason why I think Dreamworks earnings will continue to grow is because I came across some Madagascar DVDs speaking cantonese and I thought to myself “Wow… the beauty of animations is that it can be translated to any language easily, so the potential to sell their animated flicks to the entire world is enormous! You can easily translate them to indian, arabic..etc”

MEMC (NYSE:WFR) buying opportunity?

October 30, 2006

MEMC is a strong company in a strong industry but suffered a 15% drop on earnings release last week. If it drops to $30, I am going to buy all I can.

If it sticks around $35 for a few days, please remind me to buy a 35/40 bull call spread again 😛

If you wonder why I love bull call spreads, I guess its because I only research stocks which I think are strong companies with strong growth potential and so I am usually bullish on stocks I cover in my blog. And why spreads? Spreads are cheaper to buy and I love to buy cheap stuffs. Haha.. actually, its just that I can’t bear to fork out $3500 for 100 shares of MEMC but spreads allow me to pay just over $200 for the same amount of shares. Leverage is such a cool thing.

Akamai to $50 again!

October 30, 2006

Shares of Akamai were hit hard when they beat estimates and upped guidance for 2007 during the earnings call last Friday.

Guess its time to buy my favorite bull call spread again. The DEC 45/50 bull call spread certainly looks attractive now. Akamai can never stay in one spot for too long and should hit 50 again in no time soon.

TIVO – It’s now or never!

October 28, 2006

As the end of 2006 draws nears, the time has come for whether TIVO will ever make it big. Internet broadband video and movies on demand are currently hotter than they’ve ever been with Google gobbling up YouTube, it seems like a company like TIVO should be going somewhere.

With the Comcast rollout coming soon, I have picked up some $7.50 FEB 07 options as a gamble. If this stock doesn’t go anywhere by then, its time to say goodbye to TIVO forever! Been longish on TIVO for over 3 years now… been very patient already 😛