I shorted 5 yhoo july 180 calls for 5 3/4 naked just
because I think the internet bubble has burst and that
somewhere in here the run up in these stocks will end
and you will have a classic head and shoulders top. Although
there were some cautious words about the earnings I think
the internuts had a good rally and day traders were starting
to feel like the good old days were here again.
So my assessment is that the numbers were in line with
expectations, obviously the street puts out conservative
numbers to pump up their clients and more importantly to
insure against 1 cent misses that can kill a stock. YHOO
did not blow away numbers. In fact there seems to be evidence
that numbers are boosted by geocities and not generic
growth, which appears to be slowing, and may not support
the 46 billion dollar market cap this stock has. Trust me,
I think the internet is huge, I just think things are getting
maniacle.
I guess I got the idea from a client who wanted to buy
calls in front of the earnings. However the premiums were so
obscene he passed. This suggest tremendous optimism, which
have been met by good but not blow out numbers. I figure the stock
trades up a bit, as every cnbc viewer hears they beat estimates
and I'll short more in the 175 area, then look for the stock to
maybe lose upside momentum. Upside risk I see to 190, downside
160, selling 180 calls for 5 3/4 today and more tomorrow at 8
could be a great, but dangerous trade. More unspectacular earnings
and particularly if stocks do not respond well to good numbers
may get me to start buying out of the money puts on yhoo, amzn,
egrp, amtd, nite, and aol.
Everyone thinks the market goes higher-problem.
Everyone thinks yields are topped out now that the fed has tightened-problem.
People are buying lots of calls, and the vix (volatility index)
is 20 and its a clear sale at 18.
Too much complacency.
Just my opinion. BUY EMC or NOK to make money on the internet.
Huge rev, great growth, data storage and wireless internet access
you can take to the bank. Just my humble opinion.
Good luck too all. It just feels like a bubble and I been through
these before. |
