|This Trade Was Closed July 18, 2012|
Closed this trade today for a profit at 3.60 per contract. Original entry was 1.70
Original Trade Post:
The only stocks I have interest in right now are the ones with strong EPS growth. Ultimately, those are the ones that are showing strong sales and strong cost controls. Those are the cream of the crop. I really like 2 companies in the 3d printing space – SSYS and DDD. I already own DDD and today bought some July calls in SSYS. Think or swim has a nice new feature that I noticed today, which shows some very interesting data points. Taking a close look at the options activity today in SSYS, notice the calls to puts ratio (1180:145). Strong volume in the calls today. Next look at the % of volume traded on the bid, the ask or in between the ask and bid, and 89% of volume was on the ask or in between the ask an bid. Only 11% traded in the bid. This indicates to me that traders were anxious for these trades to fill which is a sign of strong demand. Then take a look at the “Delta between” data. 77% of the call volume has been in options with a delta between 21 and 40%. That’s a large proportion of OTM calls that were bought compared to ITM calls. Then take a look at the most active call option today – it’s the near month (July) $55 (OTM) call. Strong signs of some very bullish speculation. I went long this call @ 1.70 today. It’s trading at 1.95 right now. It expires in 15 days, and I need price to at least reach $56.70 to break even by expiration
Looking at the stock chart, SSYS is pushing the upper range of its consolidation envelope. A break over $55 will be a fresh move to higher highs.
Some positive news was out last week about SSYS involved in a joint initiative with the DOE, which is some good fundamental news:
“03:20 PM EDT, 06/29/2012 (MidnightTrader) — Stratasys, Inc. (SSYS) is taking part in a joint initiative with the U.S. Department of Energy (DOE) at Oak Ridge National Laboratory to develop fused deposition modeling additive manufacturing for production use.”
- The Ticker: SSYS
- Target Price: 3.60 per share
- The Trade
- Buy to Open Jul 2012 55 Calls at 1.70 or better
- Trade Opened: July 5, 2012
- Trade Closed: July 18, 2012
Chart courtesy Finviz. Click to open larger.
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