Slightly OT, but a link and my thoughts. I am interested in others thoughts as well.
dailynews.yahoo.com
Not a good sign, IMO. My money says that it tends to indicate that MSFT may be taking some kind of hit. A decision for MSFT would be far less likely to significantly affect the stock price than a negative decision would.
Out of the money puts and calls equal distance from the price (a stradle?) on each Friday afternoon may be the best play: Close them on Monday if no decision. You likely only lose the commission.
I remember the Texaco v. Pennzoil appellate decision (I was working at the time for the appellate court that released the decision). Only a very few people at the court new the decision in advance (not including me). It was released during the day. There was around 30 to 60 minutes between when it was actually announced and when the wire services picked it up. Some of us had speculated at the result and what we could (but would never do) have done with options. Ultimately, we decided that since we worked there, any one-way only position would suggest that we had advance knowledge -- inside info, as it were -- and would likely get us in trouble. But, by taking equal positions each way, puts and calls, we could have made significant money without the risk of it appearing as though we were trading on inside info. As it turned out, the put and call idea would have worked nicely. The profit from one side would have MORE than made up for the worthless other side. The same thing may work for MSFT.
The Friday p.m. announcement is obviously designed to come at a time when it could not immediately affect the markets. This, to me, says that there is reason to believe that it will affect the markets. This also, to me, says MSFT takes a hit. But, if there is no hit, the positions are closed with little loss. If it moves significantly one way or the other, one makes a nice profit.
JMO, FWIW
Troy |
