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Linn Energy, LLC Message Board

  • vol2smile vol2smile Jan 22, 2014 4:06 PM Flag

    Sold into strength and replace delta with short downside puts

    to reduce risk. The upside calls don't price in too much premium, maybe the run will be over soon ....

    Sentiment: Hold

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    • Ron-Ruby...
      Keep it going. Am loving the witty banter. Putting the fun back into investing in Linn Energy.
      Now, as soon as LINE gets to $39.50, I'm getting out...Yah, I'm quitting this stuff...I know it's not good for me...Wait a minute...just another $.25....Aaaaaaaaaahhhhhhh. Dammmmnnnn, I needed that....Okay, maybe I'm out at $42.00. Yah, $42.00...That's my target...Then I'm out...No, really. $42.00. Geeez, did you see that? Something just flew in the window....I think it's a tweet from Icon...He says Linn should drill more faster....Okay, I know that $43.00 is a rock solid target...Probably in 12 months...then I'm off the jag......

    • Vol2, I wouldn't place much store in the upside-call premium being small. They represent the same folks who see Linn as needing a correction from an impressive rally. But I think that they're assessing the price history of the past year, which I believe is a distortion caused mainly by Hedgeye's self-serving fabrications and the SEC inquiry, which was attended with much hyperbole.

      With those issues out of the way (and even putting aside the positive news that's now in the hopper), Linn Energy is a company that should never have cratered in the first place. So what's LINE doing and what are they going to be doing? Well, first it's simply making up lost ground that was unfairly lost in the first place. That's not your typical rally. Then on top of that are the burgeoning positive prospects of the company. Combine the two and we have every reason to believe that LINE may well shoot back up with the same rapidity as when it collapsed. And come the February CC the stock price will likely be further ignited from wherever it is just before the earnings report with bright trumpeting of the quarter's performance and the good times ahead. Stocks often perform with greater zest on the upside and downside than typical expectations allow. I think that Linn will be surpisingly bullish over the coming months and those low-premium calls represent a nice opportunity rather than a reason for apprehension.

      Sentiment: Strong Buy

      • 3 Replies to ronharv
      • An impressive analysis, enjoyable to contemplate.
        Too, let us factor in an unknown and variable number of other LINE-owning market participants who are not equally logical, and own other equities, even other types of investments like real estate, gold, fine art, foreign currency, and may also have margin or personal loans to cover their holdings, which are variously affected by market factiors unrelated to LINE's. Let us perhaps consider those predictive subjects like Complexity and Chaos, and rethink...again!
        But yes, energy is not out of date yet. There must surely be some profitable swing trading ahead, backed by pleasant dividends in the quiet periods. This is just a darn good investment!

      • AGREED! Great insight and all makes "lots" of sense. Let's hope it plays out as it certainly looks like we have a "WINNER" in LINE! (Finally as 2013 was a tuff year and as you say "overly done" to the downside)

      • Yeah, I was in the camp expecting a slow return to pre-crisis levels, based on damage to the company's reputation and burned fingers. But, as you point out, certainly Netflix, Green Mountain and Herbalife roared up after the initial attack proved to be incorrect (or premature). Could happen here. I'd prefer for it to play out over the year, there's a long wait to get long-term capital gain treatment on my trading units and calls, I wouldn't want this to peak too soon.