Typhoon,
I will not argue the valuation of SCH based on fundamentals, as this market has shown how easy those are to ignore, but I think you have made a mistake by grouping SCH with other OLBs. Here are a few reasons off the top of my head.
SCH clients are typically more affluent and educated, and although many are active traders, they are far different than, say DATEK's clients, and less likely to blow out. SCH does great business managing their client's 401 Ks, trusts, etc..
SCH has the best customer service, they lose less clients and word gets around.
SCH site is the stickiest, look for them to somehow leverage all those eyeballs.
SCH charges 29.95 a trade, and their clients pay it. To me this, is the #1 reason I would not short SCH, that's a lot of profit in every trade.
Now, if rates rise and market tanks, you will be richly rewarded on your SCH puts, but I would feel better short one of the other OLBs. Shorting SCH was a great idea a few months ago, but I doubt there's much meat left on that bone, I could be wrong.
In any case, you make coherent arguments and I respect your opinion, good luck. |
