All posts by jimmybob

Stocks Gone Wild…

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Stocks Gone Wild? Well not wild, but what would you call a stock up 36% or $18+ since we spoke about it on Jan 10th, exactly 3 weeks ago? Crazy?? Insane? Amazing? Lets just keep it simple and call it a money maker. Buying and holding a stock for a 36% gain in 3 weeks is not bad, but anyone buying calls on SINA at the $48 low are extremely happy people. Check out the before and after picture. Now can we spot a nice bottom, and yes, that chart looks nice too.

 

Before:

AFTER:

Plays like SINA are why this site is called Option Millionaires. A few hundred can turn into a few thousand very quickly... and if you find the right stock, a few hundred can turn into 5-6 digits.

Just check out what SINA did on friday on the FACEBOOK IPO news.  (BTW: I hate that i linked a CNBC clip). The weekly $67.50 calls were trading at .01 at high noon on friday, only to hit $3.55 a few hours later. A $100 gamble would have turned into a new SUV ($35,500)!!! Gamble?? Well isnt that what the stock market is? Legalized gambling. The house still wins (Goldman Sux, Morgan Stanley, Bank of America..ect) , while the retail trader (the gambler) gets taken to the poorhouse.

Thank you china, for giving the poor American traders a chance to make some money.. now go buy your iphone!!!

All joking aside, there are plays like SINA everyday. The challenge is finding them, and thats why we are here!

On to the next one!!

Diamond in the Rough??

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DMDN (Diamond Foods, inc) has been a very volatile stock over the past 12 months, trading as low as $26 and as high as $96. Its agreement with The Procter & Gamble Company (NYSE:PG ) to merge the Pringles business ("Pringles") into Diamond Foods in a transaction valued at$2.35 billion has been the catalyst for the extreme highs and lows.  The stock pushed to all-time highs after the news, as the merger would triple  the size of  Diamonds snack business model.  

Some more benefits from the filing:

  • Increase scale in U.S. grocery, mass merchandise, drug and convenience channels to gain greater merchandising and distribution influence;
  • Leverage Diamond's sales and distribution infrastructure through a more than doubling of snack sales in the U.S. and U.K., which are Pringles' two largest markets;
  • Gain a broader global manufacturing and supply chain platform, with access into key growth markets around the world, including Asia, Latin America and Central Europe;
  • Increase Diamond's geographic diversity, with international sales accounting for approximately 49 percent of total revenues on a pro forma basis.
Of course nothing is ever easy or certain, and rumors of possible missteps in regards to payments to suppliers that may have inflated DMND's results surfaced. It looks like the deal to merge in Pringles is on hold until it's latest financials are released ,which were postponed from December. Here is the companies explanation: (click here).
The good news is, P&G is still assuming the sale of Pringles will happen this year, and that is a good sign for shareholders of DMND.
Heck, what is there not to like about a company holding one of our favorite popcorn brands, Pop-Secret, and one of favorite chip brands, Pringles.
Expect some type of update out in the next 2 weeks, and a volatile trade after the news. We bought some calls, and will be looking to add to our position this week.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CME (CME Group) – Going to Get Some Legs?

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One of the best way's to make money trading options, is buying when a stock is cold...when noone is paying attention. Stocks with high beta(volatility), have higher option premiums. Stocks under the radar with low beta, have cheaper options.

CME is one of those stocks. We wrote about her January 12th, in which the options we mentioned, were a 500% gain a week later.

CME reports earnings February 2nd before the bell, and we think CME will get some legs leading up to the report, as well as after.

CME is a market leading clearing house, and the stock used to trade over $700. Lower exchange volumes and the 2008 downturn, has had a big impact on the stock price. Couple that with the MF global fiasco, and you have an oversold stock. It finally looks like CME is ready to turn back to the upside and head over $300.

Right now we are positioning ourselves with the $270 and $280 FEB 18th Calls currently at .65 and .30 respectively.