IMPORTANT post: BSTE -7.9% and why you can't be too confident. BSTE was on our newsletter on January 23, It was posted as a potential long and we picked up BQSBG calls (@ $0.50) as well as a buy above 31.45. Today BSTE did well for us and the BQSBG hit a high of $1.05 (a double bagger) and hit a high of 32.79 after an earnings run that began at 3:00 p.m. on Friday soared on "earnings run" into the close. That was it, we packed it up and set off (like we did with RFMD, NSCN, and scores of others) We knew we were sure as heck not holding this one through earnings. This time the calls sold and puts were picked up rather cheaply. ANYONE WHO IN ADVANCE let's you know they are holding through earnings is a pure gambler and either chooses to ignore or has no knowledge of trading strategies and the dangers of holding a stock position through the report. (We have seen them lose double digits if you actually join them into a trade like that you are inviting trouble)
So we choose puts for tonight knowing the historical price patterns of BSTE after earnings reports in the past. It doesn't matter what you chose (We actually were thinking of course of the February 30 puts) Anyhow Gemmers, THIS IS a typical earnings run. We take the STRADDLE (not at the same time) first the call, then Monday the puts at a very nice price (down 46% from Friday) and BSTE is shot down after earnings. The best and worst.. and this folks is Cycle 1 and Cycle 2 of an earnings play.
What happens tomorrow? We take profits on the puts (those that elected to pick them up, we offered of course the option) and we might have a gap 'n crap or gap 'n snap but we sure as heck MILKED THIS HOLSTEIN.
OSTK and INSP..even ASKJ hope someone followed, first two exceptionally well. Not every company is a semiconductor and you can make money long in a down market. You just have to have the right stock selections!
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