NFLX/Pirate - They did have very good earnings and guidance and surely someone is getting squeezed.
CSCO/Yodi - There's one I'd love to get cheaply again.
By the way, you guys always ask about CSCO because it's down 4% or PG down 3% as an "opportunity" but what about the ones that are down 50-80%? Those are opportunities too!
Just look over the charts (mostly from the Buy List) and think to yourself, which ones would you ABSOLUTELY want to own if the are 20% cheaper and then just sell some puts that let you own them 20% cheaper. Now is a good time when the VIX is high.
For example:
- RIG 2017 $10 puts can be sold for $3 for a net $7 entry, less than 1/2 of the current price. If you have $10,000 in an allocation block, you can sell 5 of the puts for $1,500 and only risk owning 500 for $7 ($3,500). Meanwhile, you are collecting $1,500 back on a $10K allocation of which you are using about $350 of margin buying power. That's a fantastic return on margin!
- BHI was already a Top Trade - my fists are sore from banging the table on that one.
- BTU we just discussed. Is the coal biz so awful that this stock should be down $14 of $20 (70%) in less than a year? Even if so, what about selling the 2017 $5 puts for $1.50? You can sell 10 of those for $1,500 and your worst case is owning 1,000 shares for net $3.50 ($3,500). That's a 42% return on your allocation and you're only committing about $400 in margin - super-efficient!
- ABX is interesting to me. Do you REALLY think gold is no longer a thing. It had a good run - about 100,000 years as the most desirable mineral on the planet but it's so 10 millennia ago, isn't it?
