Thursday, March 23, 2006

KBH Trade - 23/3/06

Entered a limit order to buy a KBH Apr 60 Put at $0.95 but was not filled.

On 22/3/06 AMC (after market close), KBH reported earnings for the 1st quarter of $2.02 per share, $0.06 better than the Reuters Estimates consensus of $1.96. Revenue rose 34% compared to 2005 to $2.19 bln vs the $2.24 bln consensus.

On 23/3/06, share gapped up about $0.90 when market opened but when better than expected exisiting home sales figures were announced, it prompted share to go up further and close at the end of the day at $67.82 (+3.23).

GOOG was added to the S & P 500 AMC and shot up $31 to reach $373.50 in after market trading.

Wednesday, March 22, 2006

KBH Trade - 22/3/06

On 21/3/06 AMC (after market close), NKE reported 3rd quarter earnings of $1.24 per share, 14cts better than the Reuters Estimates consensus of $1.10. Revenues rose 9.0% year/year to $3.61 Billion vs the $3.53 Billion consensus.

On 22/3/06, NKE gapped down $0.20 when market opened. I Sold my NKE Apr 85 Call for $1.85 at a loss of $0.55. I bought the call option at $2.40 on 21/3/06. I sold too fast because NKE rebounded to $85.75 around 10.07am EST and the call could fetch $2.30. Would remember this next time, though I felt the option was a little expensive to buy in the first place anyway (I consider an option with time value > $2 expensive, remember, it's time value, not intrinsic value)

Tonight, KB Home (KBH) would be reporting earnings AMC. Would try buying a Apr 60 Put at a limit order of $0.95 in the understanding that the housing sector might be entering a cyclical slowdown.

Tuesday, March 21, 2006

NKE trade - 21/3/06

Going to paper trade NIKE, Inc. (NKE) option tonight. NKE would report earnings today after market close (AMC).

NKE is market leader in the apparel & footware industry in terms of market capitalization. Daily trading volume is 1.88M. Would only enter option position some time before market close today.

Noted that DJ US Personal Goods Index broke resistance after mid March 2006. On 28/2/06, Thomas Weisel commented based on channel checks NKE appeared well positioned ahead of the spring season. Currently at 10am EST NKE is at $85.35. April 85 Call is at $2.80 (ie. time value @ $2.50). Implied Volatility is at 24.5, hist. volatility is 11.61.

Would enter option trade near market closing hour.