Yeah, I hear your points on options. My first trades dipping my toes into the option world bit my backside as well. That said, some were Winners as well.
I'm nowhere near an expert in Options as I mainly just trade Call & Put Options. I know that is pretty 1-Dimensional. I intend to educate myself further in the likes of Spreads and Other Strategies to Minimize Risk. I'd like to graduate to the level of putting a Strategy together where no matter how a Stock reacts to a Catalyst, it didn't cost me anything to exercise and still reaped the reward.
I hear you on Buying the Common on Dips, Following Momentum on Catalyst-driven Events (i.e. Earnings, News, etc.). I do the same, as volatility is an ingredient in my Investment or Trading Profile, whether it's with the Common or Options... I Trade/Invest (both) Stocks/Options with a Technical Bias but usually always have a Bottom-Up Approach with Emphasis on Fundamentals. I usually discount Macro Events but respect their relevance in relation to the big picture.
Bottom line is, I trade/invest both Stocks and Options, and I realize the Risk Leverage embedded in Options and constantly look for opportunities to capatilize on it... Kind of like how many STMP Options were up 50-100% yesterday vs. the Common's +10% (and I'd take either 1-Day %-Return, any day!)
As far as the FEB-25's, agree with you for the most part on the timing. Honestly, I'm not sure if I will hold through earnings or not? If the Options returns say 50-100%+ by then (pre-earnings).. Does it make sense to turn a Home-run into a Single (or strike-out) while trying for a Walk-off Grand Slam? I guess it depends on your Investment Profile/Style, Timing, Opportunity Cost, Technical Grade (overbought/oversold) etc. We'll see how it plays out.
As far as STMP as a stock, I believe (and you obviously concur from your posts) there was no reason the stock should have gone sideways/reversed from it's Last Q's Results' appreciation/pop in regards to it's price. The company has got everything going for it (in regards to my reasoning for investing in it, broad-stroked/outlined in my previous post). I truly think STMP is one of those companies people kick themselves for not "noticing" the company's potential earlier (after the herd catches on). I remember NFLX trading in the $20s... HANS 3-splits ago... BIDU IPO day... GOOG IPO day... CMG the day it was spun-off from MCD... AAPL in the $80s at the height of the crash, etc. ..and traded them all (as I'm sure you have of the same or like-stocks). My DD tells me STMP will be included in lists of the like.
I agree with your conviction with STMP and think the stock will be much, much higher. The fundamentals and (now) technicals are shaping up very nicely heading into Q4 Release. My DD tells me we will see fireworks Again in reaction to the Release. I also believe this time around STMP will break down the walls in regards to the stock's "Speculative Image"... I think it will be taken more seriously as a Leader (like it deserves). And for the Shorts, don't be the last one to turn out the lights, and lace up your running shoes chasing STMP Higher.
As far as the Shorts/Disbelievers in the company... Fine, to each their own. Stock will do whatever it's suppose to do. I love the fact that STMP has such a high short-ratio just like I loved trading similar leaders-to-be/highfliers like GMCR, NFLX, HANS, AMZN, CRM, BIDU, PNRA, BBBY, CMG, etc.
Oh, and not sure if you trade other stocks (I know you are a buy/hold with STMP)... I'd be up for comparing notes as I maintain a healthy watch-list of stocks I invest in, trade, or at least follow.
Been pounding the table about STMP for a long time. Sometimes not in a friendly manner - ask management about that...its not just shorts who get an earful.
I have however always believed that STMP was in a sweet spot. Internet trend taking off just as STMP was launching. PBI entrenched with the USPS and acting as if they were a division of the USPS - monopoly status and all. Took some time for STMP to find a focus that worked in terms of growing the company. Took me a while to figure out what the problem was, but basically its always been the same one. How to effectively market a product or service that is very much a High Volume Low Cost (revenue per unit) type of model. In other words STMP cannot spend $200 marketing and selling a product that only produces $20 a month. It takes a year to make back the initial investment and 36% - 40% of the customers churn out each year...so this has really been a drag on growth. The company is making headway into fixing this. The enhanced promotion channel has been scaled back. PhotoStamps is no longer the "big push" it was originally intended to be. The company instead has refocussed its marketing toward ESTABLISHED companies - ones that will still be mailing stuff 3-5 years from now, and needing a solution to do that. It has shrunk the marketing spend on PhotoStamps and refocussed it - bringing PhotoStamps into "profitability."
If anything management may have been a little too focussed on getting it right - and therefore took a "little" longer than most of us longs would have wanted to start growing the company aggressively. However, now that they know what and how to do it...it's just simply doing it...and doing more of it, until they find an inflection point where more marketing spend doesn't translate into more profit - and imo that point - because of the sheer size of the market - is a long way off. In other words - this ball is just getting rolling. My concern is that management may hold on too tight...its hard to move from a conservative/careful mode into one where a little more risk is tolerated.
The biggest issue for STMP is still it's churn rate. Its getting better as the "quality" of new sign-ups increases. As the aging of current customers goes up, I'm sure the revenue per customer increases as well. STMP has a very very very long way to go to become as entrenched as PBI was/is in the meter postage solution business.
Long term STMP is truly what I would consider a "NO-BRAINER." Its volatile but I think the shorts and the street are about to learn a lesson in what can happen when you underestimate the "little guy."