I'm not high on SOHU. It hasn't delivered strong earnings for quite a while. The price was driven up by the sale of half of Sougou to Tencent back in September, however SOHU did not benefit all that much from the deal itself. And after the Sougou deal, I don't think there's much upside for it in the near future. I'm kicking myself for not shorting it before the ER. Depending on how the Twitter IPO goes, SINA could have some very good upside, so that really depends on how you feel about Twitter. I'm holding QIHU so my opinion is probably biased, but I am very bullish on QIHU. It launched its own search engine last year, and has already captured more than 20% of the search traffic. It is expected to grow its share to 30% next year, and that will make it a real threat to BIDU. It is also a heavy weight player in the mobile market. The Chinese internet sector is dominated by BIDU, Alibaba and Tencent, and QIHU currently looks like the only company that might have a chance at challenging these three.
I don't know too much about DANG. It is tiny compared to Taobao (Alibaba). Currently it is undergoing significant transformation in its business model from a single seller of books to more of a trading platform for all kinds of things, which I have no idea how it will work out. I'm also not so sure about its potential for growth, as I don't see it could become competitive to Taobao, although the overall growth of Chinese e-commerce might take care of that. I wouldn't touch it at this stage before it turns in a profit, which might happen by the end of this year according to some reports. The stock will probably soar if this happens though.
If you look at where all the growth is going to happen in the world, though, you're going to have to settle on China. The stocks might be taking a beating short term, but look at where those stocks have come in just the past year. BIDU, SINA, SOHU, YOKU, EDU, DANG, QIHU...I mean, just avoid the fluctuations of the short sellers and realize the potential of simply being a business that SURVIVES in China. Your customer base will explode even if your market share doesn't change one iota. The best thing to do on the topic of whether or not a company is cooking its books is to get a local feel for what businesses are active there. With NQ I feel like it's always been an American business in China first rather than a China business being assessed by Americans. In the first case, Chinese people don't have much regard for the company so it's bound to flounder longterm even if the American short sellers drive it sky high synthetically. In the second case, sure you might have a bunch of Americans telling you the stock is trash (EDU is a great example), but over the long haul its prestige among the Chinese public will ensure that it thrives in the years to come.
Sold it yesterday when it rose 20%, wasn't anticipating a 2 day jump. I still am out a ton of money, and it will definitely not reach the price I bought it at.
I bought $12 Nov 16 HIMX calls just now for .24. If HIMX has good guidance on glass on nov 4th, these could easily triple from here
I trade a lot of options and a lot of equity. I generally don't like buying calls that far out of the money. It's just a tough trade buying stuff nearly 20% out of the money. For me I would prefer to do the 10/12 call spread rather than just buying the 12 calls. Maybe even do a 12/13 call spread to minimize risk. If you think that those 12 calls are only going to triple to 75 cents then it would only make sense to sell the 13 calls against that long 12 strike position. I have no idea about a few months out, but I have been selling HIMX and HLF puts in my outside investment account. I initially started that account back in 2010 and it was managed by a value type fund. I just recently took control of it and I am going to run it now. They did decent, but I just got tired of their "closet indexing" performance among other things. The only things I have left in that account that they purchased are AAPL, ACC, ATI, BTU, DSX, and GE which were all bought earlier this year. So I am slowly getting into stuff like the HIMX and HLF. In my trading account at work I've been long HLSS for over a year, ORM since July, and PMF since late Sept. I don't really have any plans on selling those anytime soon. I'll be in those as long as they keep me in. I just added NUGT about a week ago and hopefully I'll be able to hold on to that for an extended run in gold and gold miners. But I also might not be....still trying to feel that one out. I also started buying CCCR today just as a speculative buy at this support level. It's a garbage stock from everything I can tell, but it's got a small float and it's popped a few times here. I'm in small size right now. Kind of a dice roll trade, but I think I can manage the risk.
But Robbie I bought the $12 calls with hopes of it being $12 post earnings. I sank $10k on 400 contracts today and hopefully can cash those .25 contracts at .75 in 2 weeks
I got out at 2.13. It'll probably be a slow decline for them from here on out until the next news arrives. I still don't know what to make of their DNA virus prospects; these things have always been notoriously hard to generate an adequate response with. I dunno if their HPV vaccine counts as one of these, but I think I'm on the sideline for good now with them.
You missed what I said. I'll try to explain it again. You bought the Nov 12 strike calls for 25 cents. You are hoping to sell at 75 cents. If you only think that your upside is 75 cents then you should do a call spread. Call spreads are good when you think you have limited upside. You can sell the Nov 13 calls for 10 cents and that cuts your overall risk down to 15 cents a contract. So instead of risking 10k you are risking 6k and increasing your chance of profitability. That said you are risking far too much on a long shot trade. Buying calls that far out of the money is generally a suckers bet. I don't say that to be rude, but it's just the reality of things. If you feel that certain that the stock will go up you should be buying the 10 calls and selling the 12 calls. You could put that trade on for 60 cents a contract. If you want to risk 10k then you would end up with 167 of the Nov 10/12 call spreads. There are many more benefits to doing that trade than simply buying far out of the money calls. There are some more complexities, but I'll try to outline things simply. 1. It is already in the money and has a much better chance of working. 2. If the earnings aren't a blow out and the stock only goes up to like 10.50 then the 10 calls will still have a good bit of value while the 12's will drop to 0 and you will come out close to even versus losing all your money with the 12 call purchase. 3. If it is a blow out quarter and the stock rallies 19% to 12 then you profit the whole spread versus losing all your money by simply buying the 12 calls. $1.40 per contract versus $0. 4. HIMX needs to go above 12.85 for you to make more money buying the 12 calls versus buying the 10/12 call spread. 5. You are taking more risk for a lower percentage trade that makes less money. In your scenario where you hope to sell your 12 calls for 75 cents you would actually make less money than buying the Nov 10/12 call spread like I am suggesting. Does this make sense?
I get what you're saying but even if HIMX runs up to $10.75 pre earnings next week these calls would probably nearly double, I could then cash out before or sell calls then. I was planning on selling calls on the position but right before earnings when the stock would be higher than it is now....or so i hope. I completely get what you're saying but Im trying to control a max number of shares for $10k vs going for a trade I know will work. Im up alot this year so I figure this is my swing for the fence trade or bomb and lose $10k which deducts from the taxes i will owe. Actually Im really swinging for the fences bc I bought $10,11,12 calls. 100,200,400 contracts. Worst case out $30k, best case up a fortune.
There is so much wrong with this post I don't even know where to start, but I'm not sure that the bolded works like that if you aren't a professional trader. There are specific exemptions for traders. You should check with your CPA. I think you are limited in the amount of losses you can deduct from profits in one year. I don't think it is anywhere near 30k either. I think it's closer to a few thousand. It's a screwy rule from what I recall. Maybe someone here can clarify that? And I just remembered that the last part I bolded reminded me of what a cashier in Vegas told me one time when we were placing a bet. "Hey, you know the more you bet....the more you win!". Just remember....the more you bet the more you win. Words to live by. :grin:
