Tax selling is over tomorrow due to where Xmas falls this year - over $4 Monday. I bought more Jan $4 calls today
Next week is the last week of tax selling. Friday is also the expiration of December options which tends to amplify price movements. This is the time to load up - I love the January $4 calls. On Monday Dec 23rd HK will close over $4.00. This is my prediction and I'm putting my money on it.
There are very few stocks experiencing significant tax selling. The one standout is HK. So many people got in at a much higher price, selling for tax purposes can be a very smart move. On the other hand, the insider buying pattern, especially among offices of the corporation, is quite unique. As A kicker, HK has a large short interest. You combine these elements with the January effect you get a truly explosive upside potential. A move to $6, although not probable, wouldn't totally surprise me. How to play it? Tax selling ends prior to but close to Xmas. Now is the time to take action. I am selling the April $4 calls against the shares I already own. With the proceeds I am buying twice as many January $4 calls as I sold for April. At risk are only the shares I already own. Going to $6 matches my $4 per share stock price so at this level my return is 100%, or some number less, depending on how it falls out.
I am a seller of options with high premiums, both puts and calls. CZR is the type of stock I love. I see merit in both the long and short argument, but I favor the short side due to the $11 loss per share two years in a row, the $169 debt per share and the assumptions in the long position:
1 No transfer of assets to a 2nd legal entity
2 Outcome not built in to current stock price
3 The new stock moves like an IPO rather than a spin off. Often the price of a divested Co moves down
4 Ignoring the huge competition which already exists in offshore gambling
Nov 18th will be interesting
Recent sales are fairly static now vs. seasonal trends. Just look at the numbers, JCP has merely cycled some terrible comps. At the end of last year sales plunged and now we are up against those numbers, but with lower margins.
I will no longer read anything Seeking Alpha has its name on! How can somebody interested in making money be so stupid? Not a single mention of possible hedges on a long position?
I have significantly reduced my position. Major reason, ongoing insider selling coupled with no insider buying. This is a story stock and we all know it, chapter and verse. The next chapter is yet to unfold. I would rather pile on to good breaking news than be a bag holder with bad.