High Hopes

I had high hopes this weekend for getting some novel analysis out for everyone to read, but I got way bogged down doing computer networking - trying to set up a VPN between the home and office and it sucked up about 12 hours......minimum.

Anyays - the one commentary I will leave you with is the Sandisk options. I am going to be monitoring the interesting call options over the coming weeks as I have heard that long side of this one is the place to be. I was thinking that maybe expectations are too high and short side would be better, but apparently not. Here is a little break down on the available calls for October.

October Call Table:


Im not planning on buying anything too out of the money or in the money. My goal as everyone knows is too get the maximum leverage at the lowest possible cost and limit my risk by the amount of capital that i commit. Right now the options are still extremely expensive. You are paying up to 5% premum on options that are expiring within 12 days for some of the out of the money and at-the money calls. Now because the only value for both is time value - the option premiums should continue to decay/decline over coming 10 days - unless the stock price was to rise and the options were to become "in the money" and possess some intrinsic value.

If stock were still to be at $52.50 on 10/20 - and I chose to play the trade to the long side as it is looking - I would commit between $500 and $1,000 - and I would look to purchase the $55 calls for preferably $.05 - but I would say maximum of $.50. Anymore than that - and they are just too expensive and I would try some in-the-money call instead - probably the $50s which at that point you could probably get for $2.50 - $2.70 and still have some decent upside potential if solid earnings report comes out.

This is event driven trading and is extremely speculative / risky. I will give update as we approach the date more closely. I may also buy some more Newmont (NEM) October calls in anticipation of the CPI number which is coming out this Friday 10/14 - BTW - the consensus it 0.9% - wow!!!!!

Regards,

BG