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Friday, May 13, 2005

Update 7: Action: Nvidia Straddle

Sold calls at $2.45.

The total price for the straddle position was $2.55, making the total profit of +24.39% in 1 day with Nvidia (NVDA) straddle.

Topic closed.

See also:
Update 6: Action: Nvidia Straddle
Action: Nvidia Straddle

Update 6: Action: Nvidia Straddle

Nvidia (NVDA) struggling with $25.00 level. I think it breaks through and heads to $25.13 again.

See also:
Update 5: Action: Nvidia Straddle
Action: Nvidia Straddle

Update 3: Earnings: All eyes on Cisco

I would sell Cisco (CSCO) now at $18.77, it would have made +3.70% profit in 3 days.

Topic closed.

Update 2: Earnings: All eyes on Cisco
Earnings: All eyes on Cisco

Update 5: Action: Nvidia Straddle

NVDA hit technical resistance at $25.12 and dipped.

See also:
Update 4: Action: Nvidia Straddle
Update 3: Action: Nvidia Straddle
Action: Nvidia Straddle

Update 4: Action: Nvidia Straddle

Just sold NVDA puts right after opening with $0.10. Waiting with calls.

See also:
Update 3: Action: Nvidia Straddle
Action: Nvidia Straddle

Update: News: Ameritrade surges on reports E-Trade makes offer

Ameritrade Says Thanks But No Thanks
By Theresa W. Carey, Ziff Davis Internet

May 12, 2005

Following several days of intense speculation about a possible buyout by rival online broker E-Trade Financial, Ameritrade's board of directors issued a press release this morning, firmly stating that the company is not for sale.

E-Trade confirmed that it had made a bid for Ameritrade a few hours after the press release was issued by Ameritrade.
Read further:
eWeek: Ameritrade Says Thanks But No Thanks

See also:
News: Ameritrade surges on reports E-Trade makes offer

Thursday, May 12, 2005

Update 3: Action: Nvidia Straddle

Nvidia (NVDA) shares soared to $24.80 (+8.82%) in after hours after conference call and next quarter guidance. Now, there is nothing to do except waiting for tomorrow market opening. Technical resistance levels are $25.13 and $26, I hope to see hitting at least the first one tomorrow before selling the $22.50 strike calls.

See also:
Update 2: Action: Nvidia Straddle
Action: Nvidia Straddle

Update 2: Action: Nvidia Straddle

Nvidia (NVDA) earnings tops the analysts estimates.
NVDA shares trading at $24.03 (+5.45% after hours).
Waiting for conference call and outlook estimates from Nvidia.

NVIDIA Reports Record Revenue for the First Quarter of Fiscal Year 2006
Thursday May 12, 4:20 pm ET
For the first quarter of fiscal 2006, revenue increased to a record $583.8 million, compared to $471.9 million for the first quarter of fiscal 2005, an increase of 24 percent. Net income for the first quarter of fiscal 2006 was $64.4 million, or $0.36 per diluted share, compared to net income of $21.3 million, or $0.12 per diluted share, for the first quarter of fiscal 2005.
Read further:
Yahoo! Finance: NVIDIA Reports Record Revenue for the First Quarter of Fiscal Year 2006

See also:
Update: Action: Nvidia Straddle

Intel Intraday Sell-off

Today was an interesting situation with Intel (INTC), someone made a typo while entering the stock quantity for sell order (probably at least 100 times more than planned):
Stock Chart: Intel (INTC)
Chart from ProphetNet

Update 2: Melinda Gates purchases DSCM shares

Melinda Gates continues to purchase Drugstore.com (DSCM) shares. She has added 100.000 and 147.200 shares in May 9 and May 6 respectively.

DSCM has jumped from $2.45 to $3.43 (+40%) in some days:
Stock Chart: Drugstore.com (DSCM)
Chart Courtesy of Bigcharts

See also:
Update: Melinda Gates purchases DSCM shares

Update: Action: Nvidia Straddle

NVDA implied volatility will probably fall down to around 50% after issuing the earnings news.

Nvidia has to jump at least over $24.25 (+7.30%) or fall at least below $20.60 (-8.85%) after earnings result to get profit from this trade, if the implied volatility is 50%.

Analyst estimates for NVDA Q1 2005 results are the following (based on Yahoo! Finance: Analyst Estimates):
earnings $0.28 ($0.27–$0.31)
revenue $581.19M ($572.10M–$597.00M)

and for the next quarter:
earnings $0.27 ($0.22–$0.34)
revenue $579.16M ($537.00M–$616.30M)

The earnings conference call is scheduled on Thu, May 12, 2005, 5:00 pm Eastern: Yahoo! Finance: NVIDIA Corporation Earnings Conference Call (Q1 2005)

See also:
Action: Nvidia Straddle

Action: Nvidia Straddle

I made a straddle on Nvidia (NVDA). It was possible to buy calls with $1.10 and puts with $0.95, making the total price for the straddle $2.05.

Nvidia will announce its earnings after market close, that will probably force NVDA to make a big move tomorrow.

The implied volatility for NVDA is around 73% at the moment.

I actually believe that NVDA will jump on the results, but the puts are for back-up.

More explonations and information coming shortly...

Note that this is not a recommendation, but my own trading diary!

Oil price below $50

Oil falls below $50
CNN Money
May 12, 2005: 7:11 AM EDT

LONDON (Reuters) - Oil dropped below the $50 threshold Thursday as a strengthening U.S. dollar extended a heavy fall driven by rising U.S. crude stocks and signs of slowing global demand growth.

Sentiment was also dampened by a report from the International Energy Agency (IEA) saying that high fuel prices were slowing oil demand growth in key markets China, Europe and the U.S.
Read further:
CNN Money: Oil falls below $50

White House wants $25 a barrel oil

White House wants $25 a barrel oil
CNN Money

May 11, 2005: 5:18 PM EDT

WASHINGTON (Reuters) - The White House wants to see oil prices fall by about half to around $25 a barrel although reaching that goal may take time, President George W. Bush's top economic adviser said Wednesday.
Read further:
CNN Money: White House wants $25 a barrel oil

Old Stocks

Old stock and bonds certificates for sell.

Old Stocks: WorldCom

Would you like to buy WorldCom shares? Go ahead, just go to
Collectible Stocks and Bonds Catalog.

The WorldCom story:
Old Stocks: WorldCom
Chart Courtesy of Bigcharts

Stock Option Tutorials

Learning to trade options

There is an option tutorials section on CBOE site, that gives the basic idea what options are and how you can burn your money with these (I have seen statistics claiming that over 90% of option traders are trading unprofitable).

Anyway, the basic idea with options trading is to understand the potential risks and not to put all your money under one trade. There are a lot of different possibilites how and when you should use options, and some of them, instead, help to lower your portfolio risk.

Be aware that options allow to leverage your investment power and if you don't fully understand the factors which affect options price, don't better try this.

After reading these tutorials you should have the basic knowledge of options.

Read further:
CBOE: The Options Institute
Nasdaq: Understanding Options
Optionetics: Trading Education Center (good reading)

Wednesday, May 11, 2005

Update 3: Earnings: Next market movers (05/09/2005)

The percentage indicates today's close compared to the close 2 days ago.

VSTA $16.09 (-9.81%)
ZIXI $.15 (+20.00%)
BRW $15.6 (-2.44%)
TEU $15.88 (+11.04%)
DNDN $6.03 (+10.05%)
NKTR $15.70 (+8.13%)
SNRR $15.70 (-1.82%)
RSTI $30.12 (-2.14%)

This is the last posting in this topic.

See also:
Update 2: Earnings: Next market movers (05/09/2005)

Today's Upgrades

There are 16 upgrades by this moment.
Raymond James upgraded Cisco (CSCO) from Market Perform to Strong Buy.

Read further:
Nasdaq: Intraday Analyst Changes (Upgrades)

Update 2: Earnings: All eyes on Cisco

Cisco (CSCO) outlook inline with analyst expectations, shares are gapping up by $0.29 (+1.59%) in pre-market, probably heading to higher levels in normal trading hours.

See also:
MarketWatch: Cisco 3Q net up 16% as sales rise 10%
Update: Earnings: All eyes on Cisco
Earnings: All eyes on Cisco

Tuesday, May 10, 2005

Update: Earnings: All eyes on Cisco

AP
Cisco Third-Quarter Earnings Rise Slightly
Tuesday May 10, 4:35 pm ET
By Matthew Fordahl, AP Technology Writer

Excluding special items, Cisco earned $1.5 billion, or 23 cents per share,
compared with $1.36 billion, or 19 cents pre share in the same period last year.

Sales rose 10.1 percent to $6.19 billion in the third quarter of fiscal
2005 from $5.6 billion last year.
Read further:
Cisco Third-Quarter Earnings Rise Slightly

Online Trading Comment
Cisco (CSCO) beats estimates by $0.01. At first, the sotck price didn't change much. The bigger move probably comes after issuing the outlook for the next quarter (the conference call is on going). I still look CSCO optimistically.

See also:
Earnings: All eyes on Cisco

Update 2: Earnings: Next market movers (05/09/2005)

Update for the last posting (quotes @4:16 pm):

VSTA trading at $15.89 (-10.93%)
ZIXI trading at $3.15 (+10.53%)
BRW trading at $15.6 (-2.44%)
TEU trading at $15.88 (+6.22%)
DNDN trading at $6.03 (+8.26%)
NKTR trading at $15.70 (+8.20%)
SNRR trading at $15.70 (+1.95%)
RSTI trading at $30.12 (-2.46%)

5 picks out of 8 closed more than 6% higher or lower from yesterday's close.

See also:
Update: Earnings: Next market movers (05/09/2005)
Earnings: Next market movers (05/09/2005)

Earnings: All eyes on Cisco

Cisco (CSCO) will announce its Third Quarter 2005 earnings results today after market close. Analysts estimate earnings per share of $0.22 ($0.21–$0.24) and total revenue of $6.16B ($6.12B–$6.20B), next quarter estimates are $0.24 ($0.22–$0.25), and revenue for $6.50B ($6.26B–$6.69B).

Analyst Estimates for CSCO

Currently, CSCO is trading at $18.10, giving forward EPS 17.75.

I would say, the market sees Cisco in too negative light. If I had to bet, I would go long with Cisco at current level ($18.10).

Listen to CSCO conference call (Scheduled to start Tue, May 10, 2005, 4:30 pm Eastern)

Update: Earnings: Next market movers (05/09/2005)

VSTA trading at $15.75 (-11.72%), low $15.40
ZIXI trading at $3.00 (+5.26%), high $3.05
BRW trading at $15.55 (-2.75%), low $15.31
TEU trading at $15.97 (+6.82%), high $16.20
DNDN trading at $5.77 (+3.59%), high $5.95
NKTR trading at $15.34 (+5.72%), high $15.64
SNRR trading at $15.39 (-0.06%), high $16.16, low $14.55
RSTI trading at $29.89 (-3.21%), low $29.81

Not the best picks, but most of them done a notable move from yesterday's close anyway.

See also:
Earnings: Next market movers (05/09/2005)

Update: Melinda Gates purchases DSCM shares

Melinda Gates has purchased another 151.500 Drugstore.com (DSCM) shares at $2.50 – $2.66. It makes a total of 326.500 shares in 3 days, with the cost of appr $800k – $900k, take a look at Yahoo Finance! Insider transactions.

See also:
Melinda Gates purchases DSCM shares

Earnings: Vistacare Inc (VSTA)

Vistacare Inc (VSTA) came with disappointing results. The stock is being traded at $15.64 (-12.3%), but hit $15.40 (-13.7%) a little earlier. Anyway, if the shares should fall lower, I see some technical support at $15.00.

Financial Press Release
VistaCare Reports Improved Fiscal Second Quarter Results

Net patient revenue for the fiscal second quarter of fiscal 2005 was $57.5 million, up seven percent from $53.6 million reported for the quarter ended March 31, 2004. The Company's net income for the quarter was $1.1 million, or $0.07 per diluted share. Net income for the three-month period ended March 31, 2004 was $3.7 million, or $0.22 per diluted share.

For the six month period ended March 31, 2005, net patient revenue was $114.1 million, up six percent from $107.2 million reported for the six-month period ended March 31, 2004. The Company's net income for the six-month period ended March 31, 2005 was $1.8 million, or $0.11 per diluted share, compared with net income for the six-month period ended March 31, 2004 of $8.4 million, or $0.51 per diluted share.

Read further:
VistaCare Reports 2Q 2005 Results

See also:
Earnings: Next market movers (05/09/2005)

Earnings: PainCare Holdings

PainCare Holdings (PRZ) reported First Quarter 2005 results earlier in the morning. Stocks opened at 4.85 (+2.1%), but have declined to 4.60 (-3%) after the first half hour of trading.

PainCare Q1 2005 Financial Results

Zacks released a research report on PainCare Holdings one day before company's earnings release:

All of this has resulted in tremendous triple-digit sales and earnings growth. Profitability in improving with expanding margins, and the company is a leader in one of the very best performing industry groups. And, as an added bonus, shares look inexpensive.

In short, PainCare shares could certainly make a portfolio feel better.

Read further:

Zacks: Charles Norton & Allen Gillespie

Update: Health Care - Safe Haven?

Zacks gives neutral outlook for drug-biotech market performance, mentioning "drug safety" and "authorities seeking for cheaper drugs" as risks for the industry.

New Drugs Balance Out Growth in Generics
by Zacks Investment Research
09-MAY-05

Our outlook for the drug-biotech industry is neutral.

We believe the current state of the industry is evenly balanced between negative cyclical pressures and positive secular growth. Individual companies with strong product stories will continue to outperform.

Read further:
Zacks: New Drugs Balance Out Growth in Generics

Online Trading Comment
Read the original post:
Health Care - Safe Haven? (Saturday, May 07, 2005)

Monday, May 09, 2005

Melinda Gates purchases DSCM shares

Dragstore.com (DCSM) +28% in 6 days.


(Chart from ProphetNet: DSCM Chart)

It wouldn't be half so interesting, if Melinda Gates, one of the insiders, had not bought at least 175,000 shares in 2 days (see Yahoo Finance! Insider transactions).

News: Ameritrade surges on reports E-Trade makes offer

Reports: E-Trade Makes Offer for Ameritrade
AP

E-Trade Makes Offer for Rival AmeriTrade Which Is Considering Deal for TD Waterhouse, Reports Say

NEW YORK (AP) -- In a possible consolidation of the online discount brokerage business, E-Trade Financial Corp. has reportedly made an offer for AmeriTrade Holding Corp., according to published reports Monday.

E-Trade made an unsolicited bid to buy Ameritrade on Friday for more than $5.5 billion in a letter to its board, according to executives who spoke to the Times.

Read further:
E-Trade Makes Ameritrade Offer

Online Trading Comment
Ameritrade (AMTD) trading at $14.11, up by 25% in early trading.

Earnings: Next market movers (05/09/2005)

Today's earning releases of stocks that tend to be big movers on the results:

After Market Close
VSTA (low volume), (conference call May 9, 2005, 5:00 pm Eastern: Listen)
ZIXI (low volume), (conference call May 9, 2005, 5:00 pm Eastern: Listen)
BRW (conference call May 10, 2005, 9:00 am Eastern: Listen)
TEU
DNDN (conference call May 9, 2005, 4:30 pm Eastern: Listen)
NKTR (conference call May 9, 2005, 5:00 pm Eastern: Listen)
SNRR (low volume)

Time N/A
RSTI (conference call May 9, 2005, 11:00 am Eastern: Listen)

So, keep your eyes open on extended trading hours after market close.

Sunday, May 08, 2005

Books: Reminiscences of a Stock Operator

Reminiscences of a Stock Operator
by Edwin Lefèvre

Although quite an old book (originally published in 1923), it is almost a mandatory reading for everyone who is dealing with stock markets. A book that has become a classic for sure.

"Reminiscences of a Stock Operator" is the biography of Jesse Livermore (Larry Livermore), who is one of the most fascinating traders in stock markets history. It tells how a young boy became a market speculator and furthermore, a market manipulator.

A review of the book: Review: Wisdom of Jesse Livermore
Buy the book from Amazon: Reminiscences of a Stock Operator
I also found a PDF version of this book, so you can start reading while your shipment is on the way: Reminiscences of a Stock Operator (PDF)

The Secrets of Ken Griffin

Bloomberg Markets
June 2005
By Katherine Burton and Adam Levy



"It’s a midwinter afternoon in Chicago, and Citadel Investment Group LLC, with $12 billion in assets under management, is wrapping up a typical day—trading almost 2 percent of the daily volume on the Tokyo and New York stock exchanges, or about 70 million shares."

"He began in 1987 by trading convertible bonds as a sophomore from his Cabot House dorm room at Harvard University, in Cambridge, Massachusetts, with $265,000 from his mother, grandmother and two other investors. He opened Citadel with $4.6 million in November 1990. Now, he’s involved in seven global businesses, trading everything from natural gas to stocks and bonds to currencies. Citadel has recorded a 26 percent annualized rate of return; 1994 Citadel Investment Group’s was the sole money-losing year for its flagship Citadel Wellington LLC fund. A $100,000 investment at the firm’s inception is now valued at about $2.6 million, making Citadel one of the world’s best-performing hedge fund companies."


Read further:
Bloomberg Markets: The Secrets of Ken Griffin (in PDF format)

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Online Trading Comment
I have tested Scottrader some time ago and found it good enough for checking real time stock prices. Though market data for options was pretty insufficient (specially bid and ask prices). Overall, it's really good enough if you want to make long term investments, test your trading strategy or do paper trading. If you are interested in day trading or options trading, you'd better spend some bucks to get a better solution.