A Trade on Blue Coat Systems Inc (BCSI)

Dear fellow stock options traders :

Have been observing Blue Coat Systems Inc (BCSI) development for the past 2 years.

This company provides WAN optimization hardware appliances and software for controlling and securing Web-based communications in the secure Internet gateway and WAN application delivery markets worldwide.

Between Nov 2005 to Feb 2006, BCSI has dropped from a high of $51.00 down to about $23.00 when the company guided EPS and revenue lower due to substantial slowdown in pipeline during that period.

Situation has turn around for BCSI since the beginning of 2007 as the company has regained leadership in the WAN optimization market. Confidence was restored as substantial insider buying were observed between Feb to Mar 2007.

I've traded a call back in end May 2007 for BCSI Q4 earnings but it didn't move much as it was met with Shanghai index drop of 6.3% earlier in the day.

This time, I've observed the momentum of BCSI share price going strong towards its earnings announcement date on 22 Aug 2007. I've also checked that a few analysts have upgraded the stock based on growing demand within the wide area data services market.

Thus, I paper traded a Sep 60 Call at $440.00 per contract on 21 Aug 2007 before market close.

On 22 Aug 2007, BCSI didn't disappoint and reported Q1 earnings of $0.43 per share, $0.08 better than the Reuters Estimates consensus of $0.35. Revenues rose 71.4% year/year to $62.4 mln vs the $58.8 mln consensus. BCSI also issued upside guidance for Q2, expecting EPS of $0.43-0.50 vs. $0.37 consensus; expecting Q2 revs of $67-70 mln vs. $61.65 mln consensus.

The earnings report resulted BCSI to gap up +$8.00 to $68.00 on 22 Aug 2007. The share went up further 9 points to close at $77.31.

I sold the Sep 60 Call at $960.00 around 9.40am EST for a profit around $490.00.




Related Trade in my Stock Options Trading Blog

A Blue Coat Systems Inc. (BCSI) Q4 Earnings

A Blue Coat Systems Inc. (BCSI) Q3 Earnings

If you've managed to find out about the Live Freely! Seminar from my stock options trading blog and subsequently sign up for it, I hope you could do me a kind favour and mention Mr Tony Chai from Batch 14 as the referrer. Thank you for your kindness.

Wishing you Profitable in your Options Trading too.

Yours Sincerely,

Tony Chai
http://www.myoptionsonline.com

A Few Winning Trades

Dear fellow stock options traders :

The 2nd Quarter Earnings Season in the US has started about 2 weeks ago.

It's a busy week as I honed my trading skills further using the earning gapping analysis technique.

The few companies that I've used this technique to trade options when they were reporting earnings were :-
1) Pharmaceutical Product Development Inc. (ticker : PPDI)
2) Columbia Sportswear Company (ticker : COLM)
3) CROCS Inc. (ticker : CROX)
4) Apple Inc. (ticker : AAPL)




Reasons for entering above trades

Pharmaceutical Product Development (PPDI)
On 13 Jul 2007, Jefferies downgraded Pharmaceutical Product Development (PPDI 39.82) to Hold from Buy, noting PPDI's development revenue growth is decelerating. Thus, put options were intiated.

Columbia Sportswear Company (COLM)
On 25 Jul 207, Caris reported COLM had experienced several years of significant operating margin declines. Trading at 17x forward ests valuation, COLM appeared steep for current growth rates and expectations. Thus, put options were initiated.

CROCS Inc. (CROX)
CROCS had a spectacular quarter when they reported Q1 earnings back in 3 May 2007. Boosted by the announcement of the 2-for-1 stock split, CROX gapped up almost $12.00 on 4 May 2007. I expect the momentum to carry on for the Q2 earnings thus I bought call contracts for their earning announcement this round.

Apple Inc. (AAPL)
Been following Apple's development for the past few months and understood from a news in Briefing.com back in 25 June 2007 that the Mac notebooks secured 14.3% of all notebook sales in the U.S. versus 12.5% in April, 2007 (almost two full percentage points in mid-spring). Apple didn't disappoint when they announced their Q3 earnings on 26 July 2007. Mac shipments were 1.76 mln vs the 1.7 mln street expectation. Gross margin was outstanding at 36.9% vs roughly 32.7% street expectation. Call options for Apple were very expensive due to the built up of high volatility leading to earnings announcement. However, the +$7.00 gap up after earnings announcement and ample time value helped maintain some profit for the near the strike call options.

Important : The above option positions were NOT initiated based on single news brief. I've been following these counters for some time and have kept abreast of their development. You need to dedicate time, research and accumulate a certain level of experience in order to pick out some of the stocks which could make a substantial price movement after earnings announcement, from amongst the hundreds of stocks reporting earnings every week. It takes much hard work to achieve this but the rewards are certainly worth the efforts.

As I was writing this entry, the US market was rather shaky. It has already shed more than 300 points on Thursday (26 July, 2007), mainly due to the cloud of uncertainty around pending LBOs (Leveraged Buyouts). The delayed deals for DCX, Alliance Boots in Europe, CSG and WCI - which have surfaced recently, signaled the tightening of the credit markets which made deals less attractive to the debt issuers.

Be sure to monitor your positions closely if you're call options buyers.

If you've managed to find out about the Live Freely! Seminar from my stock options trading blog and subsequently sign up for it, I hope you could do me a kind favour and mention Mr Tony Chai from Batch 14 as the referrer. Thank you for your kindness.

Wishing you Profitable in your Options Trading too.

Yours Sincerely,

Tony Chai
http://www.myoptionsonline.com

Big Announcement That Ron Ianieri Just Confirmed On the Phone With the Vice President of the Nasdaq

Fellow Options Traders :

There's going a major shift that is coming in Q3 of this year that will change how savvy investors trade forever.

Armed with the information that Mr. Ron Ianieri is about to share with you, you'll be centuries ahead of 99.99% of all other traders when it comes to making 'Pirate-sized' profit.s, even while protecting your portfolio.

Today at 12PM Noon EST (12 Jul 2007), the Options University is re-releasing their 2007 Edition Options Mastery Series, which has sold out on each of the last two limited releases.

That's because options trading is about to go 'mainstream' and you now have a rare chance to learn from one of the best in the business.

Listen to what some of the other experts in our industry have to say about Mr. Ron Ianieri and the Options University :

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So let 'Today be the Day' you take the first step towards finding your personal fortune. In the coming months and years ahead, trading options in the 'new market' environment may just be the fastest and easiest way.

Will YOU be ready?

-----------------------------------------------------------

Here's where to go at 12PM Noon Today (12 Jul 2007) to find out:

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-----------------------------------------------------------

(If you go there before Noon, you'll see a brief video of Mr. Ron Ianieri and a countdown timer for when you can get all the information and check availability)

whether you're trading options yet or not, I recommend that you go to this page today at Noon, and at least find out what it's all about...

Take Care,
Tony Chai

------------------------------
LATEST!!!

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----------------------
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Do you know why Bill Gates drop out of Harvard....

Dear fellow stock options traders :

I am not sure whether you know Mr Bill Gates dropped out of Harvard, but he pulled his best friend, Steve Ballmer to drop out of Business School.

I think our parents will be shocked at such an outrage if we ever drop out of such a prestigious school before getting the coveted degree, not to mention pulling our close friend along - talk about Bad Influence!!!

The thing is Bill got his hands into something so powerful that it was supposedly banned by the Catholic Church more than 50 years ago... It has recently re-surfaced and those who know about it try to keep it from the masses. These powerful secrets are revealed to those who are wealthy and powerful including their close associates.

* The 1st World War broke out in 1914. Those who knew "the secret" were protected.

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Regards,

Tony Chai

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A Winning Trade on Best Buy (BBY)

Dear fellow stock options traders :

I have previous experience trading Best Buy (BBY) and understood that it would be a good candidate for the earnings gapping analysis technique.

Best Buy (BBY) would be reporting earnings on 18 June 207 after-market-close. After some research of the recent development of this company, I found that on 14 June 2007, Stifel adjusted their model on BBY to reflect softer comps. They expected BBY's 1st Quarter domestic comp to fall below their previous est of 3.0%. Over at Motley Fool, an article stated that although 13 of the analysts felt Best Buy would outperform the market going forward; it was kind of strange when you noticed that over the last 52 weeks, the stock has in fact underperformed the S&P 500 by more than 33 percentage points.

That prompted me to paper-trade 5 lots of July 47.50 Put at $160 each on 18 June 2007 (eve of earnings announcement) when the stock price was around $48.00.


After the market close, BBY reported 1st Quarter earnings of $0.39 per share, $0.11 worse than the Reuters Estimates consensus of $0.50; although revenues rose 13.9% year/year to $7.93 bln vs the $7.83 bln consensus. Co also issued downside guidance for FY08.

On 19 June 2007 (Tuesday), BBY gapped down -$2.10 to $45.90 when market opened. I observed the Level 2 Code, intra-day chart & volume movement and sold my positions for a paper profit of around $285.00 around 10.00am EST.


If you've managed to find out about the Live Freely! Seminar from my stock options trading blog and subsequently sign up for it, I hope you could do me a kind favour and mention Mr Tony Chai from Batch 14 as the referrer. Thank you for your kindness.

Wishing you Profitable in your Options Trading too.

Yours Sincerely,

Tony Chai
http://www.myoptionsonline.com