I see this stocks (or any) near term performance as almost stricly from meeting or falling short of real expectations (not necessarily the published one). Now there are two cases made with regard to nls: Case 1 from dlh20 and astral_tzar that the company has a lot of stale product on the shelf and both sales and margins are being devastated. Expectation is on another negative preannouncement. Evidence is the inventory build from Sept2004 to Sept2005 and the deterioration of margins. Thus the stock will fall Case 2 from the company itself and others that the problems with margins is mainly due to production problems that they have fixed and that order rate is good. As well the expectations on the company are low so the bar is not very high. Also infastructure is in place for improved operation. Expectation is on meeting or exceeding the bar. Thus the stock will rise. Who knows which case is correct, do you?
I think it would give my posts less credibility, since I would have an axe to grind.
But it's an interesting idea. What worries me is that, in between reports, the pps appears to be heavily influenced by emotions. (For example, the pps was barely affected by the horrible Q4 results, near break-even for what used to be the strongest quarter, unless you caught it immediately after one of the announcements.) For any kind of impact from the fundamentals I'd have to wait until Q1 results come out. They didn't come out until April 27 last year. So I'd want the July puts. But at 1.10 for 15 strike and 0.55 for 12.50 strike, for only 5 months, those are pricey. I'll price puts again in mid-April. Thanks for the idea.
I did buy short-term puts when the share price ran up right before the second announcement of Q4 results. Not much of a gamble there, those results had already been announced once. (It seemed unlikely that the second announcement would be much different from the first.) Buying short-term puts for results that haven't come out at all yet is a little more iffy than I like. Management of any company has a lot of flexibility in what they can report, especially in the short term.
Well Astral the Mar 15 puts are readily available priced about $0.15, the Mar 17.50's are about $0.95 or we have a special on our menu the April $12.5's at about $0.15, just right for one who does not think the stock is worth $8 and would like to put his money where his mouth is. It would after all give your postings more credibility when you actually had something to gain or lose.
One thing I'd like to clear up though. I'm not necessarily saying "bad news coming soon." I'm saying "value of stock to someone who holds it forever appears to be considerably less than today's share price." To me, that puts shareholders in a game of musical chairs. I've always hated that game.