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Thursday, November 12th, 2009
12:50pm (EST)
Intel (INTC, $19.88, up $0.04) and Advanced Micro Devices (AMD, $6.51, up $1.19) have buried the hatchet after agreeing to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.
This was certainly a surprise and as you can see, investors think AMD benefited the most. And why wouldn’t they? Intel will also be reaching in its pocket to pay AMD $1.25 billion.
Intel was up over $20 earlier this morning but is pretty much flat while AMD is holding its 20% pop. Here is what the two companies had to say:
“While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”
Under terms of the agreement, AMD and Intel basically have a new 5-year cross license agreement deal and both parties will give up any claims of breach from the previous license agreement.
It would have been sweet to have gotten in the AMD November 5 calls (AMDKA, $1.50, up $1.09) YESTERDAY as they are up 265% today but don’t go chasing…
We were stopped out of our Wal-Mart (WMT, $53.57, up $0.60) trade this morning for a 17% profit but many of you wrote to say your returns were much better. Some of you made upwards of 50% which brings up a good point. We often get emails saying there is no way you can duplicate our portfolio results (which can be viewed anytime) but here is an example of where subscribers did make better returns.
It also happened with Priceline.com (PCLN, $199.77, up $2.97) as some of you made over 500%. So, see, it all depends on the market and what YOU feel comfortable with and what your exits and entries are.
Look, we are going to put you in a lot of good trades and everybody is going to have different results. Our goal is to make you money and you can never go broke by taking a profit. If you take profits you always have another trade and that is what we do. We trade and we don’t fall in love with a position.
The Dow is currently down 47 points to 10,243 as we head to press but we see some more trades on the horizon. Current subscribers, please check the Members Area for the update on Wal-Mart.
Tags: AMD, Intel, momentum options, MomentumOptionsTrading.com, option trading picks, options help, options mentoring, options track record, options trading, Priceline.com, trading options
Posted in Company Commentary, Earnings, Market Analysis, Mergers and Acquisitions, Option Trades | Comments Off
Wednesday, May 13th, 2009
1:00pm (EST)
It’s been a tough week if you were bullish on the market trading higher. As we head into the final hours of trading, the Dow is down 150 points to 8,318. The Nasdaq is suffering the most as it is down 2.1%, or 36 points, to 1,678. News that Intel (INTC, $15.28, up $0.07) will have to pay a $1.5 billion fine has weighed on Tech although Intel is up slightly.
The European Union regulators gave Intel the largest ever for monopoly abuse and said the company must change its ways. I’m not even going to comment on this because I like to keep it simple but fining a company that sells chips that have become cheaper and faster is a joke. Intel has ate Advanced Micro Devices’ (AMD, $4.55, up $0.19) lunch for years and I don’t agree with it.
Watch AMD’s call options. People are expecting a whole lot more to come for AMD I suppose. The June 5 calls (AMDFA, $0.50, up $0.20) have traded over 20,000 contracts thus far. The July 6 calls (AMDGI, $0.44, up $0.20) have also traded 20K and I like both trades as lottery plays.
Despite the nervous, choppy market, we have found a few pockets of strength. Barrick Gold (ABX, $35.00, down $0.10) had another big push this morning and traded as high as $35.93. Hopefully you rang the register and have closed it as I suggested you started taking profits in the May 30 calls (ABXEF, $5.00, down $0.10) yesterday.
The call options hit a high of $5.83 earlier this morning and our entry prices ranged from $1.00-$1.35. Don’t get greedy.
Blackstone Group (BX, $12.06, down $0.61) fell below $12 so we are out of the June 15 calls (BKFC, $0.30 down $0.20) for a 50% loss. You should have also closed half of the January 2010 10 calls (KJLAB, $3.30, down $0.60) as they hit our stop of $3.50. Our entry price was $1.75 so we have made 100% on half of the trade. That means the other half of the January calls have over 6 months before they expire. We can lock that away in the safe and check it at Christmas…
For what it’s worth, I like the Ford Motor (F, $4.82, down $0.19) June 5 puts (FRA, $0.74, up $0.25) which are slightly in-the-money at current levels.
It looks like that “sell in May and go away” is showing up this week.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Advanced Micro Devices, AMD, Blackstone Group, Ford Motor, Intel, options blog
Posted in Hot Stocks, Market Analysis, Option Trades | No Comments »
Friday, August 15th, 2008
Nvidia (NVDA, $13.00, up $0.74) is up 25% for the month despite reporting a lousy quarter. You know when the company CEO says their quarter was “disappointing” not too much good can come from that. However, it has.
Nvidia reported a 2Q loss of $121 million, or $0.22 a share, versus a profit of $173 million, or $0.29 a share, in the year-earlier period. Revenue came in at $893 million, down from $935 million. When you go from that big of a swing within a year, you can see why the stock has fallen from a 52-week high of nearly $40 to a low of $10. So why the recent bounce?
Although the company said it expects an increase in revenues and slightly higher gross margins in the coming quarters, it was the stock repurchase program that has bulls kirking. Nvidia upped its plans to buy back more of its stock by $1 billion and may purchase up to $3 billion of its stock in the future.
The company has a little over $1.5 billion in cash and said repurchases will be funded from working capital. They won’t be doing this all at once so it will take a year or two (or more) for the whole $3 billion. At current prices, that’s about 40% of the company’s market cap.
Nvidia is in the GPU business (graphics processing units) and makes chips that do cool things. The stock has seen its shares of ups and downs as you can tell from the chart. The company has even emerged from bankruptcy before. The business has been that volatile for Nvidia.
The earnings and buy-back news came Wednesday but on Thursday over 25,000 contracts of the September 12.50 calls (UVAIS, $1.28, up $0.44, or 50%) changed hands. It was 8x that of the September 12.50 puts (UVAUS, $0.70, down $0.30) which fell 30%.
It’s hard to go long with a company that is losing money and Nvidia just reported a loss of 22 cents. Yeah, that really makes you want to rush out and buy the stock or call options, right? I’m on the side of the fence that says the buy-back means nothing right now. It’s a nice gesture for management to say that but if you’re losing $125 mil a quarter, then you might want to hold off.
Nvidia has shown the ability to adapt in the past but when you step back and realize the company is losing money, it would be such a reach to hope for a quick turnaround. However, you have to respect the option action. For you diehard believers of the company, the January 20 2010 calls (KEVAD) are going for $4. That means the stock would have to be trading at $24 by January 2010, or post nearly a double from current levels for you just to break even on the options.
With competition coming from Intel (INTC, $24.36, up $0.24) and AMD Micro Devices (AMD, $5.30, up $0.15), it’s just too risky in my book. I’m not doing an apple to oranges comparision but the Intel January 25 2010 calls (WNLAE) are going for $3.70 which means Intel would have to be at $28.70 by the same time the Nvidia calls expire. I would much rather bet on Intel going from $24 to $29 than Nvidia jumping from $13 to $24.
I don’t have an “easy button” but the choice is clear. Don’t believe the hype with Nvidia, go witht the best in the industry, Intel.
Rick Rouse
Rick@OptionsMentoring.com
Tags: AMD, graphics processing units, Intel, Nvidia
Posted in Company Commentary, Earnings | No Comments »
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Intel/ AMD Kiss
Thursday, November 12th, 2009
12:50pm (EST)
Intel (INTC, $19.88, up $0.04) and Advanced Micro Devices (AMD, $6.51, up $1.19) have buried the hatchet after agreeing to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.
This was certainly a surprise and as you can see, investors think AMD benefited the most. And why wouldn’t they? Intel will also be reaching in its pocket to pay AMD $1.25 billion.
Intel was up over $20 earlier this morning but is pretty much flat while AMD is holding its 20% pop. Here is what the two companies had to say:
“While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”
Under terms of the agreement, AMD and Intel basically have a new 5-year cross license agreement deal and both parties will give up any claims of breach from the previous license agreement.
It would have been sweet to have gotten in the AMD November 5 calls (AMDKA, $1.50, up $1.09) YESTERDAY as they are up 265% today but don’t go chasing…
We were stopped out of our Wal-Mart (WMT, $53.57, up $0.60) trade this morning for a 17% profit but many of you wrote to say your returns were much better. Some of you made upwards of 50% which brings up a good point. We often get emails saying there is no way you can duplicate our portfolio results (which can be viewed anytime) but here is an example of where subscribers did make better returns.
It also happened with Priceline.com (PCLN, $199.77, up $2.97) as some of you made over 500%. So, see, it all depends on the market and what YOU feel comfortable with and what your exits and entries are.
Look, we are going to put you in a lot of good trades and everybody is going to have different results. Our goal is to make you money and you can never go broke by taking a profit. If you take profits you always have another trade and that is what we do. We trade and we don’t fall in love with a position.
The Dow is currently down 47 points to 10,243 as we head to press but we see some more trades on the horizon. Current subscribers, please check the Members Area for the update on Wal-Mart.
Tags: AMD, Intel, momentum options, MomentumOptionsTrading.com, option trading picks, options help, options mentoring, options track record, options trading, Priceline.com, trading options
Posted in Company Commentary, Earnings, Market Analysis, Mergers and Acquisitions, Option Trades | Comments Off