Thursday, August 7, 2014
Question on Priceline.
If so many people hate it, how can their stock price and earnings have soared so high? As they say, follow the money. I have my suspicions which I won't put in writing due to the potential for litigation but now that the credit is peaked and in decline I think we will find that PCLN has been skinny dipping in some form or fashion. Still if you can buy "drug" or save "money" on your "laundering" by bidding on PCLN.COM then more power to you. This could be big. REALLY big!
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2 comments:
Hey Captain,
Hope all is well in your world. Looks like PCLN will continue to go up forever....
What are your thoughts on the 670 Strike for Jan 2016 Puts? Last trade at $9.60. Time to get in now or still wait? I ultimately can't see CMG or this dog outlasting the majority of the Jan 2016 puts, just want to get the right bang for the buck, if possible.
Thanks as always,
~J.T. Marlin
Both PCLN and CMG are backed by true believers still but the wave count does not lie. We have perhaps 2-3 more days in wave two, tops (assuming it is not already done). During wave 3 nobody will remain standing tall.
The last time PCLN was $670 was May 2013, about 15 months ago. That's about how long you have until Jan 2016 and so I would expect those puts to expire in the money. Generally the collapse side of things happens quicker than the build up. Of course, you won't hold them until maturity, you will wait until we get a 3rd of a 3rd of a 3rd where the VIX spikes massively and then you will dump them on some poor fool who is panicking to buy those insurance policies back from you.
Your dilemma is exactly why I decided to play TVIX this time around instead of straight options for the crash. Some companies just held out and held out and really tried my patience. Fortunately I held a pretty diverse hand of puts back then so something was generally in the green pretty solidly each week.
I wish you good luck on those options. I believe that through the use of margin on an ETF I can get the kind of massive leverage that I am looking for without getting stuck with a big spread that I can't trade out of if I feel that the chart is trending against me.
Of course, this is why I suggested (not "advised", mind you ; ) to use LEAPs if you had to be in options early on. When the 3rd of 3rd is about to hit I will probably buy some puts but with nearer maturities:6-9 months out. I would pull the trigger right when I think that 3rd of 3rd hammer is about to drop and I would reserve it for shares whose charts showed an exceptionally stupid bounce of unwarranted investor optimism.
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