Bought V May 85 Calls I-T-M. Thinking a soon sell-off…

I love Visa (V) and I bought 1 contract today at $4. This IPO has a higher PE + double the capitilization of Mastercard (MA) so it should surpass MA in price currently at $298! With Visa @ $86 seems very undervalued and at a bargain price now publicly offered in my opinion especially with a bigger better branded name on more credit cards.

I bought another SWN SEP 40 Call @ $6.10 (same price) so now I have two contracts with the price currently hovering around $7.50 a contract. My GTC is at $8.10 even though I want to raise it I’d rather put it in a faster moving stock like Visa.

I’ve got this subconcious feeling looking at some over inflated stock price charts that some big stocks are ready to sell-off by investors taking a breather and dealing with other factors such as their homes falling in price such as First Solar, Bidu, and Google. Yeah, I know major growth stocks with good stories, but my daily and weekly charts seem to indicate engulfing bearish candles and if within reason (week) or so they don’t move up much higher then they should follow the current down trend further down. I would short them, but I’ve been burned way too many times losing money. So until I see a big break in trend or big move I will not listen to my gutt and instead not trade the stocks at all to be safe then sorry.

I’m extremely confident that AAPL, SWN, and V will continue a strong uptrend with of course dips and pull backs in the markets, but will go UP without reason for big reasons that are making the stocks $$$.

My order on V MAY 85 Calls:
5/6/2008 10:45:47 AM (ET):
Symbol: .VEQ
Description: V MAY 85 Call
Stock: V at 86.93
Action: Bought To Open
Quantity: 1 contract(s)
Price: $4.00
Commission: $14.95
Reg Fees: $0.00
Net Amt: $414.95

GTC @ $8 +100% <— Goal time within 3-7 days

2 responses

  1. You’re still buying very near term options on long-term fundamentals (though I don’t get the argument here – V should go up because it has a higher P/E than MA?) …. this could work out if general markets go higher in the next few days. If you think the general market will go down on technicals in the near term, why buy calls on any large cap stock? I’m looking to buy some after a dip (of course overall I am very much long, but not at my maximum position).

    May 6, 2008 at 10:51 pm

  2. moom,

    That’s how you buy options. You think of long-term reasons why people should buy the stock now before it goes up. As for the general market thinking it will go down I made a point that some stocks will not go down being SWN, AAPL, and V in my opinion.

    Yeah, I did buy may calls, but I bought in the moment and Visa recently had a pull back and I’m expecting it to move higher again selling me out.
    I don’t see the markets falling RIGHT NOW, but definitely in the near term once technicals show it is fully happening in which why i’m not shorting FSLR right now. it’s to wishy-washy.

    May 7, 2008 at 3:42 am

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