Posts Tagged: amzn

Investment Strategy — Comments Off
20
Jan 10

Why are Traders trading on the Apple Tablet vs. Amazon Kindle?

We fail to understand this phenomenon. Search the web on the Apple tablet (presumably going to be announced on January 27, 2010), and at least half the articles will discuss how it is a competitor to the Amazon Kindle. Yesterday I watched the “Fast Money” gang on CNBC discuss the same thing.

If, as traders, we should have learnt something about Apple, is that they do not compete with any existing product in the market. They change the game. When will traders start realizing that Apple has never been a “me too” company. They have been a “top that” company. One has to be bold when predicting or forecasting what Apple is going to do. Only then will one come close to the truth.

Make no mistake about it. We are long on Apple stock as well as options. But we will sell when the bump-up from the news dies down. And we also think our expectations of AAPL stock price moving over $250 after the Tablet announcement is a reasonable expectation. And it will ave nothing to do with the Amazon Kindle.

Sponsor: Morningstar

Sphere: Related Content

Investment Strategy / Options / Stocks — Comments Off
23
Dec 09

Trading call options on some Netflix Amazon rumors

netflix call options rumorsThere is considerable chatter in the options market about Netflix (NASDAQ: NFLX), the online DVD rental company. The traders are looking at a uptick on NFLX as seen in the options activity. Huge trading volume was seen in the January $60 call options which are still around $6 out-of-the-money. So NFLX would have to go up by around 10% between now and January 16, 2010 for these traders to be in the positive with their options.

However we do not, for a moment, think that traders are looking to keep the trade till the expiration. There is some speculation that Amazon (NASDAQ: AMZN) may make a bid for Netflix. That surely is a huge catalyst for a quick uptick in the stock price. The question is whether something will happen before January expiration. We are going to bet that it will. We are buying the NFLX January 2010 $60 call options at a premium of $45 per contract. Our target is for the premium to double and we will be out of the trade.

Sponsor: Auto FOREX trading system

Sphere: Related Content

Get Adobe Flash playerPlugin by wpburn.com wordpress themes