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Becton, Dickinson and Company Message Board

  • trnmd trnmd Nov 2, 1998 12:37 PM Flag

    BDX's fluctuating price

    Interestingly, the daily ending price for bdx not
    infrequently moves in the opposite direction of the Dow; i.e.,
    if the Dow finishes off for the day, bdx finishes
    up; and vice versa.
    Bdx is up over 60% since the
    beginning of the year. How many other S&P 500 companies
    have rewarded their stockholders with that kind of

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    • clateo sold a huge lot so he could invest in BICO

    • To everyone who is unhappy about today's
      uneventful price action, it would be good to remember that
      on a previously uneventful earnings report the stock
      dropped like a rock simply because the report contained
      no surprises. We cannot predict what will happen
      Monday or in the future, but for today we can be
      relieved that the price is still above Thursday's close.
      Would anyone care to offer a comment on why the market
      reaction was so neutral after today's earnings

    • Thanks for the enlightened analysis. You have pointed out some things that should enable an investor to understand some of the short term price action and buy long at the right times.




    • My information about there being one large seller
      comes from the fact that, on most of the large size
      trades, the same brokerage house was on the sell side.
      That could be one person, or 100 people from the same
      brokerage house. It really doesn't matter, since their
      money is being bet on the downside move in the

      As far as the "strangle" buyer, yes, if he
      knew the stock was going to go up, he could simply buy
      fewer calls to get the same return. However, if he knew
      there was going to be a surprise in the earnings
      report, but didn't know which way, positive or negative,
      the strangle gives him the opportunity to profit from
      either an up or a down move in the stock, as long as
      that move is dramatic. There are many types of people
      who do these types of trades, some are gamblers, some
      think they know the direction of the stock, and, yes,
      believe it or not, some are cheaters in that they have
      some inside person giving them information about the
      company, before that information is released to the
      general public. Did you ever notice that in the few days
      or weeks before a merger announcement, how the
      volume of the stock of the company that is going to be
      aquired suddenly jumps for no apparent reason? Did you
      also ever notice how the options of that company also
      show dramatic increases in volume for no apparent
      reason. My point is that, in fact, there is a reason for
      this unusual activity, these people have non-public
      information. Since it is something that is very difficult to
      prove, most of the time these cheaters get away with it,
      and make large profits because of it. It's like
      whisper down the lane, in that one guy gets the
      information, buys the stock or options, and then tells a few
      close friends the information. They then do the same
      thing, and the geometric progression continues and the
      glaring evidence of this type of activity is the unusual
      volume in both the stock and options. If you look in
      Investor's Business Daily, they report unusual activity in a
      stock by printing it in boldface type.

      The guy
      who did the strangle might have been the same guy who
      sold the stock down, but if that were true, wouldn't
      you expect him to buy the puts while the stock is
      high, (and before he starts selling the stock down),
      and then buy the calls as he finishes selling his
      stock (while the stock price is low). In this way, he
      would put the strangle on for a much cheaper price, and
      since money is the driving force behind this game we
      call a stock market, that is what I would expect him
      to do, regardless of how he eventually decides to
      get out of the position.

      Hope I didn't bore
      you with too many details. Good


      By the way, the earnings have come out, and were
      reported as $.34 per share but there is a $.05 charge in
      there. We'll have to wait and see what happens to the
      stock tomorrow. I wonder if the put players and stock
      sellers only heard the part about the earnings being
      $.34, which would be much less than the $.40 that was
      projected? If that is the case, they will get their just

    • The selloff was obvious from looking at an
      intraday chart. Up to 43 by 11 AM, then drifting down to
      41 over the next 1 1/2 hours, where it remained
      until the close. But an intraday chart on yahoo does
      not show how many sellers there are. It shows only
      intraday volume and price. How do you know there was one
      seller and not several? This does not look good the day
      before earnings release. Let's hope it is a mirage. This
      event seemingly contradicts the implications of the
      options buyers of yesterday, bu,t read the last

      Buy the way - thanks for the explanation of the
      options plays. I now understand more than before. But I
      have one more question about the straddle or strangle
      play. If this is a call option hedged with a put to add
      some safety, the trader is obviously willing to accept
      a smaller gain than he could get doing a straight
      call option play. Why wouldn't he just buy fewer call
      options and get the same gain as in the straddle but with
      less money? Is it because the straddle would offer a
      lesser loss if the stock goes down? What kind of people
      do these trades? Are they outright gamblers or do
      they have greater than average knowledge and insight
      about the company and the stock price movement? This
      would be an important distinction if one wishes to use
      options activity to gauge or understand movements in the
      stock price.

      Would it make sense that the
      trader who did the straddle play yesterday could be the
      same trader who drove the price down today by selling
      a ton of stock? That is, make money on the put and
      close it out today. Then make money Friday on the call
      after the price spikes back up from the earnings
      report? I might not have this quite right, but suspect
      things like this are happening, such as the recent late
      Friday sell offs after the price has gone up during the
      day. I don't trade options on BDX, but want to
      understand all the various causes of the price action in
      order to be a better investor and buy at the best time.

    • There have been 20 such companies. Fortunate indeed are the people who are invested in them.

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