Just wanted to share my thoughts about trading NTE.
I think a lot of people COULD make a LOT of money doing this. NTE is certainly a volatile stock with a lot of volume. There are sometimes even 1 point trading ranges in a single day. If you were an astute trader and very quick, I bet you could move in out several times a month.
If you made $.40 every trade, and are trading in 1,2 or even 3 thousand shares at a time, I bet that could add up to several thousand dollars a month. You also wouldn't have to be right every time, just be right 70% of the time, and you'll do well.
If you then went short at the top of swing, you might even make more money.
If I were a more experienced trader, I would be very tempted to do this.
Unfortunately, I don't have those skills. I am deep value investor. I was buying NTE years ago at $7/share and all the way below $5/share. I don't think there is much of a question that in the long run, NTE is going to be MUCH higher than where it is now. The unknown is how long it will take to get there.
The risk is being OUT of the stock when it spikes up.
For example, look at all the people who sold out a day or two before earnings on the Seeking Alpha article. Or even worse, those who went short. They got the surprise of a lifetime.
So the main risk in my mind is that you don't know exactly when NTE is going to start moving up. I don't want to take that risk, at least at this point.
So I am going patiently sit on my shares for now. If NTE runs up into the high 20's or low 30's I might start making some moves then. I will probably be selling calls 3-4 months out at 1 or 2 strike prices higher than where it is currently trading. I figure if I make a mistake then, I'll be sitting on huge gains anyways...
What I do in my trading which is my method that does work for me sometimes on other stocks.
Once I have a position in a stock like NTE, I will buy on margin a few thousand shares & after buying the stock, I put a stop loss on my few thousand shares, Usually 1 point or more below the market. I know I can stand to lose ,& I do lose sometimes if the market turns against me.
But sometimes I do ok. The reason for the stop loss is that since I am on margin, I do not want to risk losing all of my funds. A few thousand dollars loss will not hurt me.
I only do this if I think the stock is a buy. I have done this with cirrus logic many times. Sometimes winning & sometimes losing. But in the end it is gambling & should be avoided.
I am long NTE I bought in around $9.00 a share.
The article that triggered me to buying NTE was the one that was in Seeking Alpha.
That said this stock was under the radar, with no analysts following.