RIMM ==> The USVI Winner!

[billyjoe]

Newborn,
I find the whole CAPS concept interesting , but have to do more research on it. When I went to the link with wcwhiner it wanted to compare my picks with his on a graph. How did they get my password? Must have signed up and forgot. I've never picked any stocks for CAPS.

-----------billyjoe

I see that Motley Fool CAPS people like NE and has announced a split. Didn't know that. Bought it for son's Roth a few weeks ago.

[spikefader]

...let's say MM's pick here rockets to $1000 per share....SELL the same strike for the same month......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.

NB, if RIMM gapped up on Monday to $1000 per share, what would that $220 call that you sold be worth? I'm imagining that it would be worth an insane amount relative to the small premium you received when you sold it.

And whether you sell another call at $1000 strike or not, you still take the hit on that 1st call you sold, plus the put you bought is worthless at that point. So the combined spread loss you're facing at that point is significant.

Your intended course of buying the RIMM stock on Monday and covering that call is obviously the correct and logical action. And if she opens about where she closed on Friday no problemo. But if it does gaps up large you've missed the profit on owning the stock, and are looking at significant short call losses, plus the lost put premium. You're naked.

Let's face it, the play you made the other day was a distinctly bearish one.....for you were looking to profit the premium from selling a call and then whatever premium growth the put experienced during your expected plunging RIMM price......and excellent, it worked for a couple of days and yes, had River followed you, she could have covered the call for a great profit......but the way you were talking you were expecting even lower prices.....not a word about covering. Precipitous drop I recall you saying. Profit now gone.........and whether distracted by personal misfortune or holding with green bearish hope it nay matters; you're still naked and now in the red rip.

So now you've got to buy the stock to limit your risk, start selling more calls, take the hit on the call you wrote, and hope it doesn't gap up and give a short squeeze. How is there profit in your play if that happens?

In reality, RIMM probably won't gap up large.....probably won't short squeeze, but who ever knows these things for sure? How can you start counting your chickens before they've hatched?? Yes, naked puts and calls are dangerous.

Good luck wit' your strategy; may th' force be with you!

[spikefader]

. . . lots of bears grumbling about RIMM...

And there's likely gonna be more of it ....

[New-born baby]

And there's likely gonna be more of it ....

Yeah, my old friend Spike always used to say, "Buy the channel touch. That's the smart entry." Haven't seen you using the channel tool too much lately, but it sure worked again on RIMM last Thursday.

You do know, don't you, that if I had not spent the day in various hospitals, I would have covered both my put and call and pocketed the profits, don't you?

[spikefader]

Yeah, my old friend Spike always used to say, "Buy the channel touch. That's the smart entry." Haven't seen you using the channel tool too much lately, but it sure worked again on RIMM last Thursday.

You do know, don't you, that if I had not spent the day in various hospitals, I would have covered both my put and call and pocketed the profits, don't you?

I sure haven't been channeling much lately. Last night I was studying RIMM from just about every angle, and I'm yet to find anything that seriously challenges the bullish nature of it. Below are a few more charts worth a glance.

Would you have pocketed the profit? Lord knows what you would have done. I would have hoped you would have done that, given what I'd whispered about RIMM gap support, in addition to all the stuff I've been posting about an impulsive market bounce. But looking at your comments in this thread I'm not so sure you wouldn't have looked for more bearish profits......eg. "the target has now moved lower: to $159.13. Nasty!", "gap fill coming", "RIMM has turned very bearish on us", and "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". Anyway, it's water under the bridge. Good luck on yer exit.

[skiracer]

You do know, don't you, that if I had not spent the day in various hospitals, I would have covered both my put and call and pocketed the profits, don't you?

NB,
you don't get to say that here. close doesn't count and in my opinion. making any type of option play any more complex than a simple call or put by itself or to hedge against a stock position without being in front of the screen to adjust the play if it turns bad leaves you at risk for what happened to your put play. it is bad judgement to make any complex set of puts or calls without being there to protect your investment. this is a prime example of it and how it happens and takes an otherwise good setup and trade with gains away from you. plus calls, puts, or any type of option play are much harder to unwind especially if the market is moving in the opposite direction that you want it to move.
anyone who hasn't the proper experience and base knowledge about options and how they work is foolish listening to anyone regarding option trading in general. i've always felt that it is the responsiblilty of the more experienced individual, especially on these forums where anyone can say anything they want to, to be careful of the advice they post and when they do they should back it up with all the variables and possibilities of the play for the less experienced.
i hope this trade works out for you NB but i am definitely thinking there is a strong possibility that you are in deep do do with this one and that you had better stay right on top of it and maybe just take the loss and forget about it. this is a very volitaile market right now and i still feel that alot of stocks and the market in general is primed for traders to get a number of good stocks real cheap. from this point would it seem more reasonalbe for the INDU to go up 500 points or go down 500 points. i agree with Spike that the chances are better to the upside from here and if that be the case then the strong stocks, the leaders, will be getting more play to the long side and move up. good luck with it.

[New-born baby]

NB,
you don't get to say that here. close doesn't count and in my opinion. making any type of option play any more complex than a simple call or put by itself or to hedge against a stock position without being in front of the screen to adjust the play if it turns bad leaves you at risk for what happened to your put play. it is bad judgement to make any complex set of puts or calls without being there to protect your investment. this is a prime example of it and how it happens and takes an otherwise good setup and trade with gains away from you. plus calls, puts, or any type of option play are much harder to unwind especially if the market is moving in the opposite direction that you want it to move.
anyone who hasn't the proper experience and base knowledge about options and how they work is foolish listening to anyone regarding option trading in general. i've always felt that it is the responsiblilty of the more experienced individual, especially on these forums where anyone can say anything they want to, to be careful of the advice they post and when they do they should back it up with all the variables and possibilities of the play for the less experienced.
i hope this trade works out for you NB but i am definitely thinking there is a strong possibility that you are in deep do do with this one and that you had better stay right on top of it and maybe just take the loss and forget about it. this is a very volitaile market right now and i still feel that alot of stocks and the market in general is primed for traders to get a number of good stocks real cheap. from this point would it seem more reasonalbe for the INDU to go up 500 points or go down 500 points. i agree with Spike that the chances are better to the upside from here and if that be the case then the strong stocks, the leaders, will be getting more play to the long side and move up. good luck with it.

I don't think RIMM goes much higher in the next couple of days . . . remember my plan I posted a few days ago about RIMM retesting the $210 resistance/support. IMHO RIMM retests the $210 again very soon. But of course, I could be very wrong. Your comment about the DOW moving up 500 pts from here does seem to make sense to me. There are a lot of bargain hunters out there who will probably jump in. But that is only half the market. Not so sure about the institutions here. And there is such a thing as a sucker's rally. Whether or not this one will become one remains to be seen.

Thanks for the post, Ski.

[New-born baby]

I sure haven't been channeling much lately. Last night I was studying RIMM from just about every angle, and I'm yet to find anything that seriously challenges the bullish nature of it. Below are a few more charts worth a glance.

Would you have pocketed the profit? Lord knows what you would have done. I would have hoped you would have done that, given what I'd whispered about RIMM gap support, in addition to all the stuff I've been posting about an impulsive market bounce. But looking at your comments in this thread I'm not so sure you wouldn't have looked for more bearish profits......

Spike,
When I am watching the screen all day, and I see a bull move, I take profits because I like profits. And I don't like being in the red, either.

Thanks for the charts. No doubt RIMM moves up and takes out MM's target. The question is simply how low does she go before she does that. I'll post my next move(s) here so ya'll can comment .

[skiracer]

I don't think RIMM goes much higher in the next couple of days . . . remember my plan I posted a few days ago about RIMM retesting the $210 resistance/support. IMHO RIMM retests the $210 again very soon. But of course, I could be very wrong. Your comment about the DOW moving up 500 pts from here does seem to make sense to me. There are a lot of bargain hunters out there who will probably jump in. But that is only half the market. Not so sure about the institutions here. And there is such a thing as a sucker's rally. Whether or not this one will become one remains to be seen.

Thanks for the post, Ski.

actually i said that, "from this POINT, after the FED rate cut and Fridays action, would it seem more reasonable for the INDU to go up 500 points or down 500 points. i was asking a question more than making a prediction of direction. i'm much more bullish here than bearish right now but am sensible enough not to predict anything. lots of former leaders at more than reasonable prices to provide incentive for buyers. knowing this and that fact would you be a seller right now or would you wait. i think there is a stronger chance of buyers coming in and 500 points would still leave the market at 450 or so under it's previous highs and that area would still have provided a decent correction of around 3.5 % which is normal, never really hurts, and usually brings the buyers back into the fray.

[mrmarket]

You Seeees?

Out of the Gate: Research in Motion Up
Monday August 20, 10:37 am ET
Analyst Says BlackBerry Sales Are As Good or Better Than Last Year

NEW YORK (AP) -- Shares of BlackBerry maker Research in Motion Ltd. rose Monday after a Goldman Sachs analyst raised his price target on the company, saying sales are steady and international sales should increase.
Brantley Thompson, who rates the stock "Action Buy," raised his price target to $295 per share from $260, implying the stock will rise 33.8 percent over the next year. He said BlackBerry 8800s, Pearls, Curves and Worldphones are selling as well or better than they were a year ago.

Thomson says international sales should be strong as Vodafone PLC and retailer Carphone Warehouse begin selling more RIM products. He estimates the company will report 1.375 million new subscribers in the quarter ending Aug. 31, up from his previous estimate of 1.35 million.

Twenty-four analysts report a "Buy" rating on the stock to Thomson Financial. Eight rate RIM shares at "Neutral," and one has a "Sell" rating on the shares.

The stock added $6.34, or 2.9 percent, to $226.92 in morning trading.

[spikefader]

Hmmm....I reckon breakaway might be worth respectin'....and maybe stops too.....

[New-born baby]

Hmmm....I reckon breakaway might be worth respectin'....and maybe stops too.....
]

Yes, and a little help from the FED, too. In at $223.60 Spike. And the call/put can still be covered. But I haven't yet.

[jiesen]

RIMM getting close!

Nearing the split-adjusted target of $86... came within $2 already this morning.

[Karel]

Nearing the split-adjusted target of $86... came within $2 already this morning.

Yup, my limit orders are primed!

Regards,

Karel

[squarepusher]

Yup, my limit orders are primed!

Regards,

Karel

what's your limit order set at? (if you dont mind me asking)^^
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