hoangvu90

Also a rough day for my long book across the board -- mostly in healthcare and consumer tech with a few industrials.

On the other hand, I did have one glorious trade to at least partially save my a$$ for the week. Bought NFLX $285 straddles a few days before earnings were announced after the close on Monday. I noticed that options were pricing in a +/- 11% move , but I expected the shares to move much more than that on earnings given prior reports as well as the expected discussing on pricing plans and subscriber base. Didn't have a stance on how the earnings release was going to turn out -- thought revenues would be good but couldn't figure out how much customer churn for upcoming quarters the Street was pricing in. Thus, I bet that NFLX shares would swing wildly on the call.

As it turned out, NFLX blew up on 2Q11 reports and opened at $255 (down $25/share from the previous close). Sold to close my puts within an hour of the market open the next day, and sold my calls this morning after noticing a lot of hedge funds buying back on weakness. Net gain of +36.0% on the overall trade.

In conclusion, I thought buying the straddle was a thoughtful tactical move...the timing of closing the position was a bit lucky. There's some old saying about how "luck" is where preparation meets opportunity...or something like that. Either way, I'll take what I can get.

Anyone else have some good trades for the last few weeks? Let's hear some positive stories while our government tries to get its sh!t together.



Edited 2 time(s). Last edit at Wednesday, July 27, 2011 at 04:26PM by numi.