RIMM ==> The USVI Winner!

[New-born baby]

FYI: RIMM has turned very bearish on us

The RIMM chart has turned so very bearish now. The $210 bust of support was the first clue that RIMM was headed to $184 minus. The fall has been so sudden and powerful that the target has now moved lower: to $159.13. Nasty!

You RIMM longs out there, you'll have ONE chance, imho, the protect yourself. I expect, but cannot guarantee, that RIMM will RETEST THE BROKEN SUPPORT at $210. I expect that RIMM will make a run on Thursday and Friday for the expiry at this $210 support. My advice: don't be a sucker. Protect yourself by either selling into this strength, or buying a put, or some other strategy. The fall RIMM is going to take is going to be precipitous.

The rule is this: GAPS LIKE TO BE FILLED. So much for RIMM's runaway gap.

Shot at 2007-08-15

[spikefader]

NB,
I fear ye be underestimatin' the significance of gap support.

[New-born baby]

NB,
I fear ye be underestimatin' the significance of gap support.

We'll see. I could be. In normal times, I'd immediately agree with you. But it ain't normal. In normal times we'd get a bounce to $210 between here and Friday. Those option makers are eating a whole lot of dirt these days. It'll be interesting to say the least.

[jiesen]

NBB, your 184 prediction was dead on. Nice job! Did you exit when 184 was hit yesterday, or did you revise your target lower?

[squarepusher]

NBB, your 184 prediction was dead on. Nice job! Did you exit when 184 was hit yesterday, or did you revise your target lower?

wow big comeback today for RIMM
________
WEED VAPORIZER

[New-born baby]

NBB, your 184 prediction was dead on. Nice job! Did you exit when 184 was hit yesterday, or did you revise your target lower?

It is always wise to take 50% of profits (at least) at the first target hit. But I was out of the office all day, so I did nothing. My father in law had a stroke; my mother got ill and was hospitalized, and a lady in my church had some kind of a heart attack--all in the same day.

I am not fully convinced that RIMM is headed North just yet. Wait and see mode for now.

[jiesen]

It is always wise to take 50% of profits (at least) at the first target hit. But I was out of the office all day, so I did nothing. My father in law had a stroke; my mother got ill and was hospitalized, and a lady in my church had some kind of a heart attack--all in the same day.

I am not fully convinced that RIMM is headed North just yet. Wait and see mode for now.

Wow, sorry to hear it, NBB. You have my sincere sympathies. You know, they say bad luck comes in threes, so hopefully that'll be the last of it.

I hope everyone pulls through ok!

[spikefader]

NB, sorry t' hear yer loved ones are ill; my prayers are with you and yours. Also sorry to see your +$2100 options profit turned into a 500 buck loss..... what a bummer....and what a rally off that gap support! Whodathunk it, eh? Anyway I'm very interested to hear the steps you take going forward with it, whether you just take the loss, or exit break-even next week, or whether you buy and/or sell more options in an attempt to get into green waters again. So if you get a chance, post your new positions for River, me, and anyone else interested. Personally, I think the potential for RIMM bullish 5 wave move in the days ahead is very real. I posted a chart at my site for it if you're interested. And below are the options charts for NB's put/call trade for those interested in seeing just how amazing options price movement can get.

[New-born baby]

NB, sorry t' hear yer loved ones are ill; my prayers are with you and yours. Also sorry to see your +$2100 options profit turned into a 500 buck loss..... what a bummer....and what a rally off that gap support! Whodathunk it, eh? Anyway I'm very interested to hear the steps you take going forward with it, whether you just take the loss, or exit break-even next week, or whether you buy and/or sell more options in an attempt to get into green waters again. So if you get a chance, post your new positions for River, me, and anyone else interested. Personally, I think the potential for RIMM bullish 5 wave move in the days ahead is very real. I posted a chart at my site for it if you're interested. And below are the options charts for NB's put/call trade for those interested in seeing just how amazing options price movement can get.

Spike,
I am ALWAYS interested in your charts, esp. the stuff I am trading. RIMM: no problem. Just buy the stock and I'll have a $290 profit from the put/call spread. It's that Easy. Sold the call for $10.50; bought a put for $7.60.

[spikefader]

Spike,
I am ALWAYS interested in your charts, esp. the stuff I am trading. RIMM: no problem. Just buy the stock and I'll have a $290 profit from the put/call spread. It's that Easy. Sold the call for $10.50; bought a put for $7.60.

I'm guessing it's probably more complicated than you suggest, NB. Isn't your options spread (short call, long put, both out of the money at the same expiration) also known as a "costless collar" or fence? And if so, doesn't "a stockholder forgoe any profit should the stock price appreciates beyond the striking price of the call written"? (especially if one buys the stock after a rise in stock price like RIMM has done). So how can you profit from your collar at this point in time, bearing in mind that price has now risesn above the point at which you opened the collar? What false assumptions, if any, are you making about your so-assumed future profit? What will continuing rising price do to your position at the end of the day? Obviously, this strategy is great for those looking to hedge their long stock positions with no cost, which I gather is one of the considerations River is looking at. But at the same time, one really must know the consequences of the play should market direction surprise them......i.e. being prepared to miss the upside gains from the time of the hedge. You often say options are so easy, and I'm very often quietly skeptical of it. There's more to the equation, and many more variables than first meets the eye.

[jiesen]

Well the thing of it is, he is right, in that it's easy to walk away from a properly-planned options strategy with a profit nearly every time. But that one time you're surprised by the big unexpected move, you can get brutalized. Say you could easily make $400, and maybe $4000, 90% of the time, but there was a 10% chance you could lose $40000, would you take the risk? (The correct answer is "no.") That's sort of like this situation, where if the stock prices kept moving up at today's pace until the next trading day (Monday) RIMM could open at $260, and that $3/shr loss on the 220 call becomes a $50/shr loss (or more). Not saying it's likely, because stocks tend not to move 20% over a weekend, but who knows?

If you really know what you're doing, I think options can work. But for me, that kind of risk is just too scary. You need to be able to assess the risk that an unlikely event will occur, and put a value on that. Your long-term success will be determined by how much damage you take on those infrequent (maybe <1% of trades) killer losses, and whether your profits in between those events will be able to sufficiently offset it.

I prefer making several safe bets on high-probability events, with the cost of any one of them being wrong having a small impact, rather than betting against fewer low-probability events, where being wrong can be devastating. I think this keeps the pressure low, and allows me to consider my decisions more carefully (sometimes).

[spikefader]

Well the thing of it is, he is right, in that it's easy to walk away from a properly-planned options strategy with a profit nearly every time. But that one time you're surprised by the big unexpected move, you can get brutalized. Say you could easily make $400, and maybe $4000, 90% of the time, but there was a 10% chance you could lose $40000, would you take the risk? (The correct answer is "no.") That's sort of like this situation, where if the stock prices kept moving up at today's pace until the next trading day (Monday) RIMM could open at $260, and that $3/shr loss on the 220 call becomes a $50/shr loss (or more). Not saying it's likely, because stocks tend not to move 20% over a weekend, but who knows?

If you really know what you're doing, I think options can work. But for me, that kind of risk is just too scary. You need to be able to assess the risk that an unlikely event will occur, and put a value on that. Your long-term success will be determined by how much damage you take on those infrequent (maybe <1% of trades) killer losses, and whether your profits in between those events will be able to sufficiently offset it.

I prefer making several safe bets on high-probability events, with the cost of any one of them being wrong having a small impact, rather than betting against fewer low-probability events, where being wrong can be devastating. I think this keeps the pressure low, and allows me to consider my decisions more carefully (sometimes).

No doubt a sophisticated options trader with a healthy respect for support and resistance, and a good trading edge, might have handy means and ways to turn a spread loss back to a profit or b/e. Whether it's simple or difficult is open for debate, and depends on one's experience, knowledge, ability, and financial situation I guess.

The fact is, some options strategies do have a potential to get complicated, although granted the more conservative options strategies clearly define the risk and can't get out of control; worst case scenario is you experience the maximum risk and that's it.

Yes, there are many options with options, but some are simpler than others, and some riskier than others.

Newbies should have a healthy respect for them and crawl before they walk, and not assume too much, or too little, and take care when trying to replicate someone on a message board because trades often don't go according to original plan, and we all have different abilities and financial situations.

Yes, New-born's spread trade was nicely green.....but the tide turned and RIMM rallied from gap support along with the rest of the market and the nice little profit disappeared in a flash.

His reaction at this point is "no problem, it's easy, buy the stock and you'll profit". OK, buy the stock Monday.....perhaps whatever price he can get it pre-market, or perhaps he'll wait for a discount first. What does he do if it gaps up 20%, and what does he do if it gaps down 5%, and what does he do if it opens right where it closed? Does he decide now and enter orders into his trading platform now or will he be at the screen early Monday to make the decision? Variables that newbies might want to know about if they followed him.

I guess I have a problem when I see people painting rosy pictures about options, and how easy they are. The fact is, the unsophisticated and learning traders should be very cautious with options and take the time to research them, watch them, see how they work, papertrade them.....before opening an account and trading live. Good profit can turn into good loss if one isn't careful.

[New-born baby]

No doubt a sophisticated options trader with a healthy respect for support and resistance, and a good trading edge, might have handy means and ways to turn a spread loss back to a profit or b/e. Whether it's simple or difficult is open for debate, and depends on one's experience, knowledge, ability, and financial situation I guess.

The fact is, some options strategies do have a potential to get complicated, although granted the more conservative options strategies clearly define the risk and can't get out of control; worst case scenario is you experience the maximum risk and that's it.

Yes, there are many options with options, but some are simpler than others, and some riskier than others.

Newbies should have a healthy respect for them and crawl before they walk, and not assume too much, or too little, and take care when trying to replicate someone on a message board because trades often don't go according to original plan, and we all have different abilities and financial situations.

Yes, New-born's spread trade was nicely green.....but the tide turned and RIMM rallied from gap support along with the rest of the market and the nice little profit disappeared in a flash.

His reaction at this point is "no problem, it's easy, buy the stock and you'll profit". OK, buy the stock Monday.....perhaps whatever price he can get it pre-market, or perhaps he'll wait for a discount first. What does he do if it gaps up 20%, and what does he do if it gaps down 5%, and what does he do if it opens right where it closed? Does he decide now and enter orders into his trading platform now or will he be at the screen early Monday to make the decision? Variables that newbies might want to know about if they followed him.

I guess I have a problem when I see people painting rosy pictures about options, and how easy they are. The fact is, the unsophisticated and learning traders should be very cautious with options and take the time to research them, watch them, see how they work, papertrade them.....before opening an account and trading live. Good profit can turn into good loss if one isn't careful.

Yes, Newbies: options can eat you alive if you are uneducated about them. You do not need much education to sell a call, buy a call, or buy a put. But when you run around naked: naked calls and naked puts, that's where the danger is. Just remember that.

Okay Spike, let me explain. Monday: if RIMM gaps up even to $250, $300, $350, $1000, whatever, just buy the stock. Easy, right? For our purposes here, let's say MM's pick here rockets to $1000 per share. Then at the same time SELL the same strike for the same month as your current call, in this case, I have sold a $220 SEPT call on RIMM, so I would SELL a SEPT $1000 call. Then I would BUY back my SEPT $220 call. There would be a profit involved because options include a time premium. Sure, it'd be only $300 or $250 profit--not much percentage wise, but then again, it ain't a loss. And remember, the time premium goes away as the stock moves past the strike. In this case, the time premium on the $220 strike would be evaporated; the $1000 strike would still have time premium left in it.

If I paint too rosey a picture, my apologies. I am not trying to put one over on anybody. But I use options on stocks so I don't have to sell for a loss. Most often I simply sell a deep in the money call. I have always told readers to sell calls on stocks they own to initiate them into the action.

Hey, let's say River took my advice and sold a RIMM AUG $185 call on her stock; if she covered that call Friday morning, she'd have made $2200 right there--and still owned the stock. What's wrong with that?

My view is that stock prices move up and down, and sometimes the down can be a 25% hit. Why lose 7% on a stop loss, or more without a stop loss, when you can make adjustments with options without selling for a loss? That's my view.

RIMM's future: I am not convinced that RIMM is through to the downside just yet. Friday was impressive; and if RIMM goes higher, that is fine with me. But I wonder if the market is through "adjusting itself" lower just yet. I am holding onto my RIMM SEPT $200 PUT.

[billyjoe]

RIMM is a very interesting stock to speculate about. I just hope it isn't in the last stages of appreciation and meanders for the next 12 months.

----------billyjoe

[New-born baby]

RIMM is a very interesting stock to speculate about. I just hope it isn't in the last stages of appreciation and meanders for the next 12 months.

----------billyjoe

Been reading over at Motley Fool . . . lots of bears grumbling about RIMM there . . .like this one:

http://www.fool.com/investing/general/2007/08/13/5-stocks-splitting-shares.aspx

And this guy, wcwhiner, he ranks 12 out of 34467 CAPS players at the Fool site, he dogged RIMM short at . . . $149. Eating a lot of dirt on this one. But he's a 71+% stock picker, long or short, but he dogs RIMM as overpriced.

http://caps.fool.com/ViewPlayer.aspx?t=01001607032191429882