Options for shorting AOL:
Most of us are confident that AOL has it's back to a wall:
Loosing members, reduced billing rates, increased competition, incompatible with new internet software etc...
There only out is the member base as asset for customer marketing $'s.
I think there is a good chance they will sqeeze some profits from advertising on exsiting base to keep there head floating for a while.. but this deck of cards is likely to fall... It's when! News like the post above will eventually make it to the buying public!
AOL held it's own today even though it was a tough day for tech stocks.. that means they are likley to bounce up in the next two days! If you believe the market will rally once the interest issue is out of the way
OPTIONS are priced as follows:
Oct 30's @ 1.00
Nov 30's @ 1.75
Dec 30's @ 2.35
Jan 30's @ 2.75
All options expire on the 21 st of each month.. If the price runs up over the next 3 days... the cost of the options will fall.. I will probably jump in on thursday picking 2m units for Oct, Nov, Dec each
Return on investment is as follows:
Short 200 shares @ $35 - Captial @ risk 7,000 out of pocket 3500
Option Nov 30's 2,000 -captial @ risk 3,700 (apprx)
If Nov 21 price of stock is $ 22.00
Options could pay 8*2,000 = 16,000 -3,700 = 12,300 profit
shortint Could pay 200*13= $2,600
If nov 21 price of stock is $45.00
Options - You loose the 3,700
Shorting and you get called or fold on your own:
45-35 = 10 * 200 (shares) = 2,000 loss
Again, the biggest challenge with options is you don't controll the call date - it's in stone when you make the deal!
One thought!:
Let's get to gether put some reall money into shorts and options (choose your weapon) and post a really nice page "10 reason's to leave AOL" - and e-mail it there members! - and copy it to the press! - If we don't go to jail we'd pocket some great money! and educate the public at the same time! - |
