Someone thinks LCC is going higher

[autofixer]

I found this article interesting:

http://www.schaeffersresearch.com/commenta...e&c=allfeed

Someone knows or suspects something.... but what? They are betting that the LCC stock price is going up.

 

[jimntx]

Considering the fact that all of our stocks are in the toilet right now price-wise, it wouldn't take a great deal of money or risk to manipulate any of our stocks.

I'm not conversant in the options market, but is there a minimum number of shares that can be specified on a call option? If, for instance, the minimum call is 1000 shares, and you specify $5/share (LCC is trading at $3.59 right at this moment), you're only risking $5000, and 10,000 of those options would be only $5 million. In that heady environment, that's chicken feed. I'm just saying...

 

[73320]

Considering the fact that all of our stocks are in the toilet right now price-wise, it wouldn't take a great deal of money or risk to manipulate any of our stocks.

I'm not conversant in the options market, but is there a minimum number of shares that can be specified on a call option? If, for instance, the minimum call is 1000 shares, and you specify $5/share (LCC is trading at $3.59 right at this moment), you're only risking $5000, and 10,000 of those options would be only $5 million. In that heady environment, that's chicken feed. I'm just saying...

Listed options on the stock are for 100 shares not 1000. You can click on the options chain on yahoo finance from the stock quote screen, they are on the left side tab under options. When you open that screen you will see the options listed by expiration date and strike prices. You choose the length of time and the price. You will see volume for the day and open interest as well as bid and ask prices. Open interest is how many contracts are outstanding. 1 contract equals 100 shares. Calls are the right but not the obligation to buy the stock at that strike price until the date of expiration you choose. Puts are the right to sell the stock at that strike and expiration. Call is bullish bet and put is bearish bet.

The leverage comes into play on your $5 strike scenario if you were to hypothetically buy the Jan 2010 $5 call for .50c. The .50c quote is actually $50.00. If you bought 10 Jan 5 calls you spent $500 for the right to buy 1000 LCC between now and the third Friday Jan 2010. Since LCC is currently 3.61 this option is out of the money. You could buy 1000 LCC now for 3.61. Lets say that in late Dec LCC is $6.00. Now your option are in the money by $1.00 and they would price at a little more than that. You sell them for 1.00 and you doubled you money. If you bought the stock you put out more cash and did not make as high of a % gain. If LCC did not move up much from 3.61 during this time your options would decay in value as your time to expiration keeps getting shorter and you have less chance of being right. Options are continually decaying due to time value. You could lose all of you $500 options play if the stock never moved from here wile you would still have the same price of your stock in that scenario.

Trading options is very difficult because you need to get time and price correct. In the scenario if you bought them today at .50c and LCC went to 4.20 lets say in a wekk or two, your options would cost more as they are moving closer to the strike. You could sell them in that case and book a profit. They do not need to be in the money to sell them. You can sell them any time. I want to buy the Jan 2010 2.50 put for .10c in the next few weeks. They are currently .40c. If I get them at .10c and LCC cracks and is at 1.80 for insatance,
the puts will be .70c. So if I bought 1000 of these puts it would cost me 10k. If the stock went to 1.80 I could sell them for 70k.

There is not enough open interest in any series to hint that large players are involved. The largest open interest is the DEC 1.00 put (BK bet). If you see volume on an option chain very high especially above the open interest it could indicate somebody knows something. They could just be hedging as well. TMI I am sure but I hope this helps.

 

[freedom]

Hmmmm

I have only three letters for ya


SEC


:cop: :cop: :cop:

 

[28L_or_10R?]

LCC was up about 10% wed with volume more than twice the average. Folks were buying in a big way. Oil is dropping and the economy is showing signs of improvement. If you follow technical indicators (not fundamentals), a breakout was to be expected.

 

[jimntx]

Listed options on the stock are for 100 shares not 1000. You can click on the options chain on yahoo finance from the stock quote screen, they are on the left side tab under options. When you open that screen you will see the options listed by expiration date and strike prices. You choose the length of time and the price. You will see volume for the day and open interest as well as bid and ask prices. Open interest is how many contracts are outstanding. 1 contract equals 100 shares. Calls are the right but not the obligation to buy the stock at that strike price until the date of expiration you choose. Puts are the right to sell the stock at that strike and expiration. Call is bullish bet and put is bearish bet.

Thanks for the explanation. I think I'll just keep my $4.75 stuffed in the mattress in the back bedroom like always.

 

[28L_or_10R?]

If I had a spare $100K to invest that I could lose every penny of I'd take it and invest $20K in each of the legacy carriers. US, CO, UA, DL & AA.

The upside potential is so high for a short term gain that even if say UA or US go away the gains from the other three should more than offset the losses.

A merger happens, stock usually goes up at least for a few months. There is short term money to be made.

Airlines are only good for short term. You can make some good money from them, though. I sold my United shares last week and made a 40% profit after holding it only for a couple of days. United has always done me well in the past. For a short time last year, it made up for what I had lost on my 401-k. For a very short time... :blink: :wacko:

 

[vantheman63]

If I had a spare $100K to invest that I could lose every penny of I'd take it and invest $20K in each of the legacy carriers. US, CO, UA, DL & AA.

The upside potential is so high for a short term gain that even if say UA or US go away the gains from the other three should more than offset the losses.

A merger happens, stock usually goes up at least for a few months. There is short term money to be made.

In all candor...there are two better phrases for this..."gambling" and "trading." LOL

"Investing" is when you want to lend your money, longer term, and grap long term growth.

I think in airline stocks...at BEST, you are gambling when you are trading "common stock."

When you are a hedge fund...and you are getting "preferred" stock, then you are probably investing. 😉

The craps tables at Vegas, Atlantic City, Monacco and Mohegan Sun offer only slightly worse odds than common stock in airlines. LOL

 

[twoturnin]

am going to stick my neck out and say business is a science and these folks running the airline are doing "things" for a purpose---I'd put my money on the airline being sold ----with our cheap labor costs and LOA 93 coming up this would be a great time to dump us--too many "signs"-----O MY

 

[N965VJ]

The craps tables at Vegas, Atlantic City, Monacco and Mohegan Sun offer only slightly worse odds than common stock in airlines. LOL

And at least in LAS cocktail waitresses in skimpy little outfits come around with fee drinks.