It needs to stabilize with a flat or slightly green close before I buy another chunk. I'm just not good at catching falling knives.
10,000 contracts? Where? I don't see 10,000 contracts total between all calls and puts across all expirations combined.
Agree. I would much rather read a post with an opposing view supported by a logical argument with facts than read 100 cheerleading (or bashing) posts with no substance. I've been investing and trading for almost 40 years and my biggest losses have been when I fell in love with a stock and didn't look at it with an open mind that I might be wrong this time. I've been actively trading GLUU for over two years and this last round is the first one which appears I will lose money on (bought 1/2 position at $5). In hindsight, I should have been paying closer attention to insider sales and not so focused purely on the technicals (but hey, thats worked for the last 2 years so I figured why change now). It would be nice if this board had more intelligent discussion (both long and short rationale). But I rarely read the board anymore because it is 95% one-liners that GLUU is either great or a pile of crap, with no analysis or logic to support the opinion. Just to hard to find posts worth reading. So Oilman, keep posting; even though we have a different investing philosophy your posts do give me (and hopefully others) something to mull as it may apply to our particular investment strategy.
I wouldn't put a great deal weight on that $2.75 spike at the end of trading on an options expiration day. Combine that with a decent sized sell order from an insider and it is most likely the market maker balancing his book. As you know, the big trades aren't bought and sold ( blocks representing a good portion of the average daily volume) directly. Those big blocks are contracted with a broker (usually the market maker for that security) for a predetermined price. The market maker or broker then tries to get the best price (high for a sale, low for a purchase) and then keeps the difference as additional profit. If MM wrote all those open calls (as opposed to actual share holders) then they had to come up with the shares to deliver since all those calls were still in the money.
Trade, I just watch the options and wait either for a roll-over on pricing or a lack of closing a position when options 101 strategy says it should close. Right now my guess is they will try to run it down as far as possible over the next several days or a week to cash out the puts and still have time for it to move above $2.50 for April expiration. But not enough proof (yet) for me to actually put money down on that theory. For now I will just sit patiently an wait.
Looks like it has stabilized here around $2.62-$2.63 so I guess its time to cover. Not the 20% I was expecting, but I'll take the 15% swing profit for a one week trade. Can't get too greedy. April options are shaping up to be very volatile
hey kingspellcheck, that was my line LOL (although we do play it slightly different; I wait for it to actually break 20 and 80 where you get more trades per year by playing when it gets close to 20 and 80). I'm back in with trading shares at $5 and ready for another ride. Following the fast stoch for the last 2 years has been a gold mine with GLUU.
hey weed, my fellow options trader, long time no see! Yes, options. When the options didn't rollover the day before earnings, I took a very small long position (wished it had been bigger) and had to sell short out of another account the next morning since when earnings came out my buy hadn't cleared yet. Since they didn't cash out on earnings after the spike I went in for a quick additional short trade. No trader in their right mind would have NOT cashed on a spike just a few days before options expiration unless the reason to sell the calls in the first place was to hide a share dump. MM now has an incentive to price pin at expiration and with light volume can easily do so. If we don't get the pinning action tomorrow, those 44k shares will get dumped Monday or Tuesday. I will cover at $2.50 or Tuesday at the latest. I don't see any catalyst to warrant a bigger volume day in the short term, so I think my play is still good. I'll play this thing long or short whenever I see a 20% or better likely return for holding a week or so max; its nothing personal, just a trading opportunity. And this has been a really good week for trading, catching a 20%+ return on the way up and way back down (if it hits my $2.50 target). The biggest risk with trading GURE is getting over confident since it's been a couple years since I made a bad trade on this one. Good Luck Weed! Hope you are getting some good trades out of this action as well. Probably be another few months before we get a good trading setup again (although the April options do have some good looking potential; have to wait and see).
I expect to see $2.48-$2.50 by tomorrow close if volume is light. If not, then by Tuesday market close. Early next week will be the time to re-examine the trading pattern.
Shinysilver, I appreciate the reasoned response. And what you propose might be plausible if Jiaxing wasn't a lighting company; a raw chloride or coal provider and I might even buy that idea. Perhaps I don't have a big enough imagination. I suspect the money is in fact in the bank. My biggest fear is who owns or controls it. I am worried it has been used as collateral for one of Ming's other companies and we would never find out about it until the pps gets high enough that short starts digging. Ocham's Razor. Why else would the company use stock as partial payment for recent acquisitions and continually need to borrow money. And why buy a five story building from the Chairman to provide a working area for a handful of employees. I've spent time in China and I can tell you the average office employee occupies about 25 square feet. And the $100k building maintenance contract with Ming is just pure greed. These actions add up to a pattern of bleeding the company. It just makes me wonder what else is going on that we don't know about. There are some good people on this board and I truly do hope this company is straight and you make lots of money. I would take no comfort in seeing it delisted because the only people who really get hurt are the average Joe retail investors. But having followed GURE for several years now, there are enough head scratching things to make this nothing more than a good trade because of all the manipulation. Now if this things ever gets and stays above $3 for a while and its not taken out by the shorts, I may have to re-evaluate my DD. Good luck to you (sincerely).
Shiny, I respect you and your opinion, but its not about the shadow banking system. It just doesn't make sense to have that much money sitting somewhere earning no interest in a completely liquid account and then need to borrow more money from someone else. The entire $107+mm is sitting in 'on-demand' accounts at 2 banks according to the 10k. What possible reason could there be to consistently borrow money and immediately repay it to the CEO? That doesn't leave you scratching your head?
kingfrog, the answer to that question is precisely why I trade this and would never hold this long term (at least until I hear a reasonable explanation.) This borrowing from Ming's other companies has been going on for years.
it certainly is getting interesting. I thought there was a fair chance the options would roll over and puke this afternoon; take the profit and run. So far, they are holding firm. Guess someone wants to see what happens tomorrow. My personal guess right now is the report will be moderately good, but no earth shattering news. That will allow the pps to run up to around $3 in the next few days. If the ITM calls start cashing out at a discount Wednesday or Thursday, there is a serious risk of a market dump for GURE on Monday. Watching closely the next few days to see which way it goes. GLTA
Position building in both the puts and calls near the money for April. For GURE, it is becoming a much larger position than I've seen in the last few years. I've been watching the blocks and these are not retail trades (round 150 and 250 blocks). And they are trading at close to fair value, so I haven't figured out the intent yet (net long or short). It could be 2 or more entities, but my guess (based on the timing) is it is a single entity. If not before, we should have a clear picture of the strategy by March 20th. Man, I love these chess matches!
There is the 30% bounce I was looking for. Took longer than I thought it would (total of about 6 weeks). It was fun, but I cashed out this morning. Probably too early, I know, but just can't resist booking the 30% return for only 6 weeks. Based on how other China smalls have gone, we will probably get back to near $1 at least once more in the next month or two for another cycle up. GLTA
exactly. And today is a prime example where it's substantially on no news and big volume and in the same day is crashing. These China smalls are manipulated like hell. The only way to win on this is to recognize the setup and take advantage of the trade being played by the big fish.
Trade, I don't disagree with you. The difference is right now for China small RTOs, its almost a presumption of guilty until proven innocent and both the exchanges and SEC will halt these RTOs much quicker than they would a US based company with US assets. I doubt there are many $300 mil cap or so in that range companies in either the US or China that could withstand the scrutiny of 24/7 surveillance the shorts can bring on a company if it is profitable enough Something can be found to infer impropriety, real or imagined. Heck, give me a day and I can find inconsistencies from year to year in 10K in probably most companies this size. And if all the assets of the company are outside the US, there is nothing the shareholders can get their hands even if investors win the suit. So unless the formula changes (ie, the company has assets in the US) the risk just isn't worth the reward to the large investors. And that is why it is unlikely you will ever get BF for one of these companies, short of a buyout and relisting.
alti.juan, your premise that just because the short interest is low means the market doesn't think it is a fraud, is faulty. Up until very recently, this was a sub $2 stock. The low short interest merely means the shorts didn't see a way to make enough money on it for the risk. The fact that this has traded for the last couple years at a fraction of BF is a very strong indicator that the market believes that the RISK of it being a fraud is higher than the possible reward. Let this thing get above $4-$5 and shorts will come out of the woodwork; there will be people camped out recording movement at each GURE facility. It doesn't really matter anymore whether GURE is squeaky clean legit or not. If the price gets high enough to make it worthwhile, the shorts will find something or at least imply enough to get NASDAQ to ask questions. In this environment, the exchanges and SEC or looking for reasons to get rid of every single China small RTO. If the exchange asking questions doesn't get it halted, it will still be enough to knock back down to a buck or two. You may not like it or think it is fair, but such is life. This ends in only one of two ways: if GURE is completely legit, it gets bought out and relisted on another exchange and you make maybe a $1 or $2 premium, or option 2, it gets delisted. This isn't likely to change in the next couple years. Trading these is the only way you control your destiny with any China small RTO.
Closed 3/4 position at $3.04 just a few minutes ago. Haven't seen anything in the options to indicate a roll-over yet, but it is so overbought now, I want to lock up some profit. Can't complain about a 21% profit in one week.