AMZN missed its earnings pretty bad and the stock is paying for it after hours - down 13%. I was expecting it to miss a little, but it was worse than a Shaq free throw attempt (35c vs. 40c). Revenue actually beat the estimates (254B vs. 242B). I did check out the Feb40 puts, but decide against it. Would've been up at least 100%!
SBUX came out with a disappointing 7% increase in same store sales for Jan, which fell way short of expectiation (last Jan: 12%, avg monthly increase: 10.5%). This isn't the first time SBUX has failed to impress (8% last August). I'd be scared to own this stock at such high PE multiples. The stock is WAYYYY off from its 52 week high of $65.
Updated 02:10PM
What Fed meeting?
As expected, he Feds raised the short term rate another quarter point today. Market dropped a bit, pushing the SP and Nazz into the reds, before making a strong and encouraging comeback at close. The lack of action almost put me to sleep (it's definitely not my work)
AAPL continues to flirt with the $80 barrier, going as high as $79.90 before settling at around $79.55. I remained very bullish on AAPL and will wait for it to break $80 before making any moves. The Feb75 call is now up to $5.50! GOOG closed "only" up $14, after being up as much as $24.
WOW, AMZN really stunk it up AGAIN. Drop it like it's hot!
Updated 01:20PM
Google will now search... your garage???
Don't laugh, stranger things have happened.
the only thing that sucks about being right is not benefiting from being right
- some famous philosopher
Ok, you got me, that quote belongs to me. I was RIGHT on picking GOOG to beat estimates. I even went so far to say that I would buy the Feb 200 calls because I felt it was unlikely to see a +/- swing. My PROOF. I ended up not buying any since most of my money is in this other company named Apple.
Well as it turns out, we got the $20 swing, probably due to short squeezes and lots of upgrades. Here is a rundown on how the different calls fare:
Feb 200 call - $6.20 --> $15.20 -- HI = $20.00
Feb 210 call - $3.60 --> $8.70 -- HI = $13.50
Feb 220 call - $1.80 --> $4.00 -- HI = $7.80
Feb 230 call - $0.85 --> $1.70 -- HI = $4.40
Feb 240 call - $0.50 --> $0.65 -- HI = $2.55
At this point, Feb200 stands out as the best ROI with a 145% gain. However, if you had a crystal ball and sold at today's peak, the 230/240 calls would've yielded 400% compared to only 233% for Feb200.
Clearly, in order to maximize the ROI, you must be right on both the direction of the stock AND the amount of moment. Unfortunately, for most of us, the second part is irrelevant more often than we like.
The market is acting like a lazy gorilla. With the Fed's decision coming up at 11:15AM, we are unlikely to see any major movements. GOOG and YHOO have retreated a little bit since running up early morning. Google's world domination partner AAPL has joined the fun and is flirting with the $80 mark. If it breaks the $80 mark, I will sell my Feb75 calls to buy some Feb80 or Mar80 calls to maintain my exposure to AAPL.
Updated 09:30AM
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