I bought 30 17.50 calls yesterday and would normally sell them on a pop like this. I'm thinking of converting the to stock and holding on for awhile. Seems like the bottom is in and there is way more potential to the upside and not much to the down side. Thoughts?
you have a pretty good profit not to have taken some off the table. You should buy some cheap puts to hedge yourself if you are so inclined or you can sell some of the calls and roll up into 25 calls if you feel this bullish.
You have to remember that the continuation of the economic collapse of 2007-2008 is imminent plus the company did guide eps lower than street estimates which is worrisome in that they could be stuffing the channel in terms of product.
Sandbagging is one thing but beating huge and guiding lower than estimates is odd behavior. The accumulation/ distribution charts showed short covering in morning with distribution and renewed shorting later on.
30% moves in one day on beats and downward eps guidance usually retrace so I recommend cautious protection.
Thanks for the sound advice. I agree it is a little greedy not to sell at least half if not all on a pop like this. The way the day trended though makes me think there might be more short covering to go. Kind of reminds me of when Amazon gapped up to 120 and then drifted up to 140. The more people that short it on the pop end up keeping it a float. I waited a long time for Blue Nile to come down. Another high P/E high short interest stock that floated up for a long time.