mafia69

Nokia (NOK) is pretty cheap right now 2.68 I believe. And with their new Lumia 820 and 920 WP8 phones coming out later this month, might be a good stock to buy. Opinions?

espelirS2K

NOK just needs to be bought out.

Although, with RIMM reporting surprisingly good earnings, NOK by follow that train.

Will

FB is up 20% today, which is a nice change.

Tuan85

any other feedback on OPTT, it doesn't seem like they are making any money?

Should i buy a 2 month option on WPI @$85?

magician

Call or put?

Tuan85

Put.

Magician, i would appreciate your advice on WPI and any opinion on other stocks. Ive been lurking this forum for awhile and you have been very knowledgeable and a great asset to this community.

It will be my first option. I work in the industry of WPI and have a feeling they might be going down, even to the 80. However i think the safe choice is 85.

Mr Dave

omg -- check out Smith and Wesson and Ruger (both up 9% on the day).

LOL -- how did I miss that?!

magician

Thanks for your kind words. Maybe you could go over to Off-Topic Talk and tell the people in the thread about the Monstor lawsuit that I'm not such a bad guy.

The long-term trend for WPI has been fairly strongly up, and I don't have any specific knowledge that would lead me to believe that it'll be down, so I'd be a bit chary about buying put options. If you bought puts @ $85 and the options cost you $5, it has to go down to $80 for you to break even. Perhaps a safer route (assuming you're quite certain that the price will go down) would be to sell calls @ $85. If it goes down you'll be ahead the call premium, and it would have to go up to $85 plus the call premium before you start to lose any money. Just a thought. Addendum: selling naked calls (i.e., selling call options when you don't own the underlying) is quite risky: the downside is unlimited. Attempt this at your own risk.

Mr Dave

Solid advice.

Question: if hypothetically the stock went through the roof and Tuan has sold a call against non-existant shares, and if the buyer of said call exercises the option...isn't Tuan on the hook for 100 shares @ market value that he'd have to sell for $8500? I guess I'm asking if it's legal to sell a call against shares you don't own -- or if there is a major downside risk to it.

I'd never even considered this before so I'm curious about the different angles.
Thanks in advance!

magician

Thanks.

Yes.

Yes, it's legal. However, because of the downside risk, dealers will generally require a large margin when you do this.

I, personally, would never do this unless I were certain that the stock price wasn't going to go up. I might not do it even then. (I edited my earlier response to highlight the risk.)

My pleasure.