It is rather ironic that a good day being a day that a new all time low is recorded and closed 1.58% lower than the day before.
However, if a real bottom is formed, it is nonetheless a good day.
You have a point.
So do you have any investment tips, strategies and/or advice for us? You seem wise.
My advice to anyone is to diversity your portfolio into around 10 stocks (or however many you can keep track of, but not fewer than 5). So even if one drop 50%, it won't wipe you out.
How was the preliminary count done? Would there be another sometime soon?
These numbers look wrong.
That is $16. Someone is fooling around.
The data is still there on nasdaq if you want to see it.
0.94Kandi Technologies Group, Inc. (KNDI) Pre-Market Trading
$8 * 0.94 13.31%
08:00 $ 8 High 2
Don't give up just yet, the end is near. Just wait until IBB hits 250 then it should reverse course. But if it doesn't, then it is time to consider getting out.
You can't look at CMRX chart, because it is at all time low, so it looks as if there is no support. So use IBB as a proxy. So we are near a strong support, and if you sell at support, it is the worse time.
No, I don't think so, because there isn't one.
Look, another day, another new low. Why would you even consider taking a long position at this time? The cash value maybe at 5.7 or 6 (which I doubt very much). But if management continues to receive that kind of compensation for poor performance, it won't take long to drain it all, you said so yourself. I think this is the precise reason why it is hitting a new low everyday.
gpls (and I) discovered that it is very likely some fund manager is betting at least 2.65 million on KNDI (3.79*100*7000), Do you have an opinion on this? Do you think (at least starting wondering) if institutional investors are starting to pay attention to KNDI?
CMRX drop from 35.57 to 7.86 when it open on Dec 28, 2015. That's is a 78% drop, which is more than 50%. According to you, if everyone has a "responsible risk strategy", they should ALL get out. Is that what you are saying?
By the way, how do you know what percentage of his portfolio the guy invest in CMRX? Say he is well diversified, and has only 5% (even 10%) of his portfolio in CMRX, Losing 50% in CMRX is only a loss of 2.5% (or 5%, if he put 10%) of his totally investment.
Dec 28, 2015 7.86 7.90 6.43 6.62 26,485,100 6.62
Dec 24, 2015 35.45 35.82 35.42 35.57 156,100 35.57
You have a great point. But just because some firm is bullish, doesn't necessary mean the PPS will rise. (The trade is actually close to 2.65 million)
Note that this is at least the second attempt, the June contracts just expired didn't pan out for the "customer" (the seller of the puts).
gpls, I am thinking too much. If you buy another 7K $10 dec put tomorrow, say the premium is $1, Don't tell me the MM doesn't have to do anything to earn that $700K premium. He must short a certain amount to hedge his bet with you,
Fascinating and thanks! This is something I haven't thought about.
So, you are saying the seller of the puts is one big bull. his next step is to use the proceeds to bid up the price in the next six months so the options will expire worthless? Then he can sell back the shares at above $10 (or simply just getting his KNDI shares for free)
WOW. If it works out his way, it is brilliant.
Very interesting, very interesting indeed. But what about the other guy who bought his 7K contracts, he is not going to sit around and see his contracts turn into some worthless "papers" (electronic charges is more appropriate). I bet he is shorting the hell out KNDI and making sure that the price fell below 6.25... albeit slowly and he is one of the MMs, so he knows what he is doing. In fact, he is at work today as you can see a "straight" line down.
My understanding is there is a way to dynamic hedge his bet so the writer of the contracts can lock in a fixed amount of the premium $735K regardless of the price, he doesn't care the price is above 10 or below 6.25, his money is made the date he wrote those contracts.
Thanks for putting a new spin on this.
Thanks. I think you can see today's plot (a straight line down), the guy is obviously hedging those 7K 10 Dec puts that was placed last Friday. A little over 30% of the trades were shorts, so he already shorted about 115K shares.
I will start my buying once he's finished his hedging. I think it would be a good time to buy.... also now that Kandi is selling EVs again from April, I heard it is a the best selling EV in China.... again.
"Kandi Panda EV: One of the best-selling models of 2015, the city car has adapted to the new incentives rules and returned in April, with last month being already the Best Selling all-electric model and Third in the plug-in ranking, with 2.598 units, at this point Kandi seems to be the only automaker able to reach similar sales levels of BYD best-selling models. "
gpls, sorry I misspelled your moniker (not that I think you care :)
I want to ask you if you know how a option writer hedge a $10 Dec put, underlying PPS at 7.26? I guess you don't really need to hedge if it is just one contract, but we are talking about 7K contracts which amounts to 700,000 shares. Premium for the trade is $735K, to make this in six months, what you need to do to lock in a portion of this handsome $735K?
How much do you need to short to hedge this? Do you know? Thanks.
I was hoping glps would step forward and say a few things about options that I don't know. :(
Anyway, when the June put options expired, happened over the weekend and that 700K transaction is a done deal. The owner of the put options sold 700K to the writer of the option for 10 apiece, "getting" (10-7.26) = $2.74. (I used the word getting instead of making because he might have paid over 2.74 of the option, in which case he actually lost money for that trade.
Now forget about that trade and start with the new December $10 put (from yahoo so it is a bit off):
10.00 KNDI161216P00010000 3.79 3.70 3.90 -0.05 -1.30% 7100 16
Someone bought 7000 put contract $10 strike for 3.79, meaning 10 - 7.26 (Friday closing price) = 2.74 in the money for 3.79. that is 1.05 premium (time value). Obviously by December 16 he would break even if the PPS falls to 6,21 and he would start making money if the PPS falls below 6.21.
We all know this from the buy side of the put option. But what about the sell side, the write of the put options? He is holding 1.05 * 700K or $735K, He has to do "work" or hedge to get this money, in case PPS fall below 6.21.
He (writer) hedges this transaction by shorting KNDI (not all 700K, but some "right" among to lock in the premium he received). Unlike the buyer of the puts, he doesn't HOPE the PPS would rise, so he can pocket the premium, he has to WORK (hedge) to get paid.
Now, do you folks see why the PPS drop today? He is hedging a 700K shares position in case it goes really down. BTW, this hedging is not done in just one day, he has to continuously hedge his position based on the PPS, for example, if PPS rise, he would cover some of the short position. I believe he is using dynamic hedging to do the trick.
My original question was that the June and Dec position are related and I wanted to know how that works.
(Feel free to correct any of my understanding, especially glps.
So, there will not be any dumping of 700K shares, as the puts position simply rolled over to a later date. Is that a valid conclusion?
I see that. But I saw the article that says:
"optionMONSTER's monitoring program shows that 6,760 June 10 puts were sold for $2.70 and 6,760 December 10 puts were purchased for $3.90 on Friday. Volume was below open interest in the June contracts, which expire at the end of last week, indicating that a bearish position was rolled forward by six months."
I just wanted someone how knows better to explain what goes on when someone rolls forward puts.
You do have a good spin on this one.
Can you look at is as that someone will dump 700K shares by Wednesday close?
Let me just finish my thought.
Because there cannot exist an arbitrage situation (for too long), if the PPS as you suggested "may be in for another period of sluggishness or decline ..... below $3.00," Using the fundamental logic of finance, I can assure you that the cash value is NOT 6 or 5.7. It is simply the PPS that it is trading at plus the cost of making the buyout.