Sharing Knowledge in Smallcaps

[streetshooter]

KP: ELN OPTIONS

Saw your post over on the private board. Been playing catch up on all the posts, finally had a few days off, even got to play trader on VITX and got to watch the action on stocks i was following or even own.

Tell ya sure makes a difference when you can monitor a stock for a few hours.It was nice:)

Anyways, back to ELN. Whats your question?

If i was long on ELN and still felt comfortable that its rise would continue, i would be looking at the Jan 04 5.00 calls.
They are in the money( which gives you intristic value, and adds less risk to the play)You could go with the 7.50 calls, and if ELN goes to over 7.50, you would be in the money, and should clean up!!!But, the underlying risk here would be what happens if ELN stalls? Or heading into July or late summer we have a severe market correction( and we are due!)And if ELN tanks like the rest of the market.... those out of the money calls will get clobbered, and even if you play out to Jan 04 on the 7.50 calls,
it would be difficult to make up loss ground, considering you will have to deal with time decay.

And i dont advocate averaging down on options.

So in my view, if i need to go long on ELN and want to use options, the Jan 04 5.00 calls would be the play, if i felt confident on ELN hitting 7.50 or more.

But, IMO, the play would be hold your stock position till you feel like you have to sell, then wait for TA reversal on the down side, and PUT it( short)Even minor corrrection on PUTS in the money will yeild good results. Then after the stock bases again, and you still like it, turn around and CALL it .

This way you can take advantage of both upside and downside swings, and back to upside.

Even though ELN has done well, at current price, with a company that is losing money, is to pricey for me at current valuation.
At some time the steam will run out on this, myself, i would feel more comfortable PUTTING ELN when the time is right. With a TA sell signal.... but i dont see that right now.

So i will watch. And wish you more success with ELN.

BTW, with them selling off assets to cover debt payments, how much will this effect their sales going forward?

And also whats up with Sachs filing to dump over 6 mil in shares? Any significance?

Good Luck,
Shooter