09.26.16

$AICA & $BABA have done excellent. As far as $AICA – Let’s keep it for now. We made money on the selling calls & the stock is up over 20%.

Todd

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08.18.16

Key Portfolio Stock:  $BABA and $AICA

I consider a “key portfolio stock” is one that has significant upside. This may be a “dream” but the stock requires close attention.

Acacia Communications, Inc.

This position has positions in the August 12, 2016 Newsletter.

1) Acacia, a maker of high-speed interconnect modules for Internet cloud infrastructure, was up 41% due to a great earning’s report.

2) The company reminds me of the George Gilder wonder names of the late 1990’s. Cisco, Juniper, and a few others retained their competitive edge.

3) This, $ACIA, is strictly a high-risk trade – but I do believe we can take a small position.

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$ACIA Trade Terms:

1) Assume $ACIA is trading at $98 per share. This is background info only. 

2) Buy $ACIA: 50-shares at $100; $5,000-Debit.  Keeping position. 

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3) Buy an Aug 19th expiry, strike $115 Call. Assume $117 price to determine price. 

Today the stock price ranged from $116- $124.90. I’ll mark $200-credit  since the call expires tomorrow.

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4) Sell an August 19, strike $105 Call.[$6 Credit] Assume $117 price to determine price. Net [$117 – $105 =$12-Debit] + $6-Credit =$600-Debit

5) Buy an Aug 19th expiry, strike $85 Put. [$200-Debit]

6) Sell an Aug 19th expiry, strike $95 Put.[$6 Credit]; [$600-Debit]

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My expectations are neutral. I do, however, believe $ACIA will go up in price. We will make money on the 50-shares in this event. The option spreads will provide a credit. We will adjust the options prior to or on Friday, which is option expiration. My ideal outcome is $ACIA moves higher. The market is still relatively small at $2 million.

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Only $ACIA Holdings: 50-Shares of $ACIA and 1-$90 protective put. 

7) $ACIA: We have 50 shares. Let’s buy 1-September put.

(ACIA160916P00090000): Net $255-Debit. This is a $ACIA protective put: expiration September 16; Strike $50.

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Todd

Disclaimer