Bear Call on GRPN (Real Trade)

Reasoning:
1) Fundamentally the stock seems over valued.

2) Technical analysis might not be useful as the stock was a recent IPO.

3) Option pricing is indicating that you can be paid to short the shares and hold them.

Last time I saw this type of option pricing the stock proceeded to decline. See my post on Inverted Collar – GRMN. If you can find shares to short you can repeat what I did in the inverted collar trade for low/no risk profits.

Entry Point:

BTO Dec Long Call Strike 19

STO Dec Short Call Strike 15

NET Credit of  $1.01

Risk of $2.99

Exit Points:
Primary Exit (PE): Let options expire worthless.
Secondary Exit (SE):
Roll position out in time as long as the option pricing exists.

Trade was filled on 11/28

Call Calendar – AAPL (Virtual Trade)

Reasoning:
1) Technical indicators are showing sell signals and chart is showing a stagnant trend in the short term. Long term trend is bullish.

2) Fundamentals still strong. I don’t see much further downside. Stochastic is over sold and we are near support.

3) Given the short term sell off in the market this may be a buying opportunity long term. AAPL is approaching value territory in the mid 300′s.

Expectation is for a bullish to stagnant trend.

Entry Point:

BTO Feb Long Call Strike 410

STO Dec Short Call Strike 410

NET DEBIT of  $12.00

Exit Points:
Primary Exit (PE): Reduce cost basis to zero. Short term- Let short call expire worthless
Secondary Exit (SE):
Bullish: Roll short call.
Bearish: Exit if stock trends below support around 355.

Trade filled on 11/22.

Long Call – CMG (Virtual Trade)

Reasoning:
1) CMG has had strong fundamentals.

2) Stochastic is oversold. Stock is in a long term bullish trend.

3) Support seems to be at current level based on longer term trend line on the daily and a bounce at this level in Oct.

Expectation is a resumption of the trend.

Entry Point:

BTO Mar Long Call Strike 355

NET DEBIT of  $10.3

Exit Points:
Primary Exit (PE): 100% gain. Will increase secondary exit to lock in profits or reduce risk for every 20% gain.
Secondary Exit (SE):

Bearish: Exit if stock trends to 290.

Trade filled on 11/22.

Bear Call on GRPN (Real Trade)

Reasoning:
1) Fundamentally the stock seems over valued.

2) Technical analysis might not be useful as the stock was a recent IPO.

3) Option pricing is indicating that you can be paid to short the shares and hold them.

Last time I saw this type of option pricing the stock proceeded to decline. See my post on Inverted Collar – GRMN. If you can find shares to short you can repeat what I did in the inverted collar trade for low/no risk profits.

Entry Point:

BTO Dec Long Call Strike 28

STO Dec Short Call Strike 24

NET Credit of  $1.1

Risk of $2.9

Exit Points:
Primary Exit (PE): Let options expire worthless.
Secondary Exit (SE):
Roll position out in time as long as the option pricing exists.

Trade was filled on 11/15