Thursday, April 26, 2007

The Options Screener Needs More Work

That small number of calls bought in Trident (TRID) is not going to do so well given the way the stock is reacting to the 8K tonight. This is the problem with these options systems - bad discernment. Even services that I have been subscribing to as a benchmark have this sort of trouble where the volume and volatility looks like its saying something, only for a totally different outcome. So the Screener will need another kick in the pants and more adjusting.

But, no matter - my large put position against Broadcom (BRCM) looks good to go tomorrow morning and will absorb the $1000 loss in TRID. How's this for guidance from a CEO...

"Mixed outlooks from a few of our larger customers are causing a lower than normal level of visibility into our near-term results. We believe that these issues are near-term in nature and we remain optimistic regarding our prospects for the second half of the year."

Yikes. BRCM is down over 3% and we haven't even gotten to the conference call. I decided on BRCM not because of options activity, but because of having followed this company for a while and the recently bearish comments from a variety of analysts.

MSFT beat on the top line by 3 cents, but guided a bit lower for this quarter and the year. Still, the stock has managed to get above $30. Will the CC make a difference. We'll know soon enough. Here again, the read on the options was murky with put and call volume about neck in neck, BUT given the channel check buzz for Vista and Office 2007, it seemed like a no brainer to be long.

The one that we all should have been in: Baidu (BIDU)... back to $130. Shoulda, Woulda, Coulda. Amazing.

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