Hi Malcom: There aren't a whole bunch of CAWS option contracts out there and I don't know if one could track who is writing them. I know that anyone can write them (I have been looking recently at purchasing the right kind of stock--the one's with high option premiums--to buy just to write option contracts on them). GKM may be writing some of the contracts, but as I said, there are so few contracts open right now that it probably would not be of much value to manipulate the stock for that pupose. Plus, IF they are STILL holding alot of their stock it would eventually be in their best interest for the price to go up.
You are right, option can be risky, which I why I have always recommended doing them with a really experienced broker. When done with a good broker, who has access to institutional technical analysts and gobs of research, some of the risk can be eliminated. Let me say that on a technical analysis basis, without a strong upward trend starting, this is not a great options candidate because you are buying the options on the story and not the technicals. I just feel that the new BANX agreement, and the start of the selling of video services, (ie, the story) will give it a few points and start a trend sometime ptior to the end of June (hopefully, MUCH, MUCH, MUCH, earlier). Plus, those June 5's are real cheap. Buying the June 5's is not a rec from my broker, just a hopeful hunch on my part (which is when I get into trouble with options).
Your caution is well warranted. Options are not for everyone and (I know I am repreating myself), in my opinion, should only be done with a good options broker. And, as I stated above, CAWS technically is not a great options candidate so you are buying on the story. And, as Dale (I think) pointed out a while ago, the stock price is only about 2 1/2 over the June 5 option price. (Heck, I have been buying some options contracts lately which costs the same CAWS's share price.) |
