M,
<< If SCMR and CIEN rally tomorrow, I will buy some PUTs. So, I would rather have that downgrade after SCMRs poor showing. >>
Might want to reconsider buying puts on a stock that has just received downgrades. Particularly so in the case of SCMR---these downgrades are far more likely to be buy signals, not sell signals. Look at the analyst upgrade/downgrade history:
biz.yahoo.com
The last time there was an upgrade, there were three in a row, one on 2/18/00, one on 3/1/00, and one on 3/30/00. These corresponded to the market top and SCMR's all-time high, which it has never seen since. So much for the upgrades. Now notice: while SCMR was proceeding to drop from its high of 199 to the low of 21 1/2 now, there was not one single peep out of these analysts who advised us to buy at the peak. So, now that SCMR has lost 90% of its value----now they downgrade? What might be their motivation?
If you ask me, this is a classic case of analyst retail bag holder squeeze---get the designated bag holders to buy high when our big clients have told us they have gotten the profits they want and now want out (and want to take short positions), then get those same designated bag holders to sell low, when those same big clients have told us they have covered all their short positions, and now they're ready for another round of long profits, and want to buy in just a bit more cheaply.
askresearch.com
I'd be strongly considering calls, not puts---otherwise, you'll just join the ranks of the designated bag holders (i.e., retailers).
JMVHO.....
Walkingshadow |
