Possibly today isn't the best day to initiate a short position, because it is an holiday in Portugal, I'm at home with my kid crying all the time and my wife complaining because I'm working ::) (I'm not really working, having fun ;)), but ...
I'll do it !
Excuse me because I don't have all much time to explain this short position (I still want to buy one gold company for the 3 Stocks on Fire Portfolio), I'll explain better and dig further at the first update after the close.
Here's the stock's chart:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=11161;image)
I see a double top and a new bearish trend. Also the company seems to be, at first sight, way overvalued (market cap is $366.1M, cash $11.75M, insiders are all selling, P/E Ratio of 68, etc).
Looking at a shorter time frame, perhaps there will be some rebound because the stock already had a steep decline, but longer term I think the double top will confirm itself. That will only happen when the stock closes below $7.72, so you see there's potential for a big sell off from current levels of $9.61:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=11162;image)
I just want to see how Ramsburg is going to deal with this short position on the 3 Stocks on Fire Portfolio, in programming terms. I hope everything goes well with this.
So, I'll sell VDSI stock short around the open, 6.66% of the Portfolio as always.
Good luck on the 1st short stock Dave! Ive always been wanting to learn strats for shorting stocks but have never really had the time to look into it, with school and maintaining my long positions taking up most my time. Come to think of it.....Its 6:30am at the open right now, and i havnt even gone to sleep yet cuz im studying for damn anthropology ??? Last final at 2pm and then a long winter break for me ;D I'll be watching closely on your short selling strat ;D
once again, Good luck
-fousc
This sucks!
My broker doesn't have shares to short :-(
Good luck David :)
Many members may not be able to borrow the stock. This stock also does not have an option chain.So puts are out of the question. I know David dislikes options but it would be a way for members to participate when unable to borrow stock. I like the pick and was able to borrow the stock and do believe that shorts should be a part of this service. When you can't borrow the stock check for an option chain ,you may find a way to participate. If I see a put that makes sense to me on one of Davids picks and I am asked I will show a put and define the risks. This should only be used if you are shut out of the trade. I want to be clear here. Don't even look at the put if you can borrow the stock.
1reilly,
who is your current broker?
I am not a big fan with trading options, one can lose pretty quickly with those. I have read that actually selling a call is much safer bet than buying a put since 95% of the calls if held expire worthless.
Morgan Stanley
I don't want to muddy this thread up with conversation about options. David surely wants this about VDSI. I'll send you a private E-mail. But for everybody don't use naked options ever. If you ever sell a call or sell a put you better have that stock in your account. Covered option trading is prudent naked option trading is crazy. JMHO
Please help me.
Does anyone know how to do short on Ameritrade?
Thank you.
Quote from: huayilu on December 08, 2005, 10:55:48 AM
Please help me.
Does anyone know how to do short on Ameritrade?
Thank you.
My advice would be if you don't know how to short then don't short. Research the details of shorting first so that you understand the mechanics and principles of the process.
Good Luck
wow!!! well hopefully you did not figure out how to short on ameritrade, but you do it exactly like you buy a normal sotck, put in a price, but place a dot in the sell short title. then sit back and watch it go down. I guess news that came out at 3 in the morning is sending this guy up.
Good luck with this one, lets see:
I waited a little, and shorted at $10.30. I agree that this stock is still overvalued.
Knowing my broker, he probably went long the stock just to make sure I could borrow it. He's so good to me!
My first short. 1000 shares at 10.19
David, did you have this 3 am information when you made this pick? Just curious.
About the 3Stocks Portfolio Page.
As you may have notice, our Portfolio page is not showing this Short trade yet...
I'm working on that, because I have to make some changes on the code to allow us to track the performance of Shorts.
Our entry price was @ $9.67
(will be soon at the portfolio page)
best regards,
Hi David:
Well I decided to follow your lead although I have some reservations about the trade. I shorted 800 shares at 10.11 so far and am trying to short 1200 more at that price. However, here are my reservations, which are fundamental:
Revenue for 3rd quarter was 13.4 mm or 80% YoY. Out of that $1.7 mm earnings. Earnings grew 52% YoY, so while not keeping up with revenue still quite profitable. Looking at the trailing 12 months 43.4 mm with $5.2 profit, over 10% on a trailing 12 months. This is is BIG. The earnings yield dis in line with govies. Lets extrapolate out the 3rd quarter earnings - we may see $7mm; if growth continues this could be higher, say $10mm. Now $10mm earnings on 366 mm mkt cap is in like with market sector, and if growth stays strong this may not work as a short.
However, I see David's plan (I think) and if this closes below 9.44, we may well see this go into the 7s, as David is suggesting I think.
Good luck - and nice short darkz at 10.30!!
Defenderyou
Sorry should have gave info on 3 AM news. Its good news, not great thou. You def will be back to business when things calm down. Just never a good thing to see a stock sky rocket once you short. And i would bet that this is some of yalls first time, which must have made some knees week. it will be ok thou. here is the BLUF (bottom line up front) 3am news:
By adding VACMAN Controller to their HSM infrastructure, banks can kill two birds with one stone. They have a highly secure server environment and state of the art Digipass strong authentication to prevent uninvited outsiders to enter their networks. The fact that VACMAN Controller for HSM uses an existing security environment ensures an ultra-low Total Cost of Ownership (TCO).
Ok, the portfolio page (http://www.3stocksonfire.org/3stocksonfire.php) is able to track short trades now.
To identify a short trade you'll see a (S) after the ticker name, the Today's G/L is also performed from the short side, which means that up is down, and down is up, in this case a performance of +3.23% on VDSI is performing a loss of -3.13% on our position.
regards,
Quote from: Ramsburg on December 08, 2005, 02:30:11 PM
To identify a short trade you'll see a (S) after the ticker name, the Today's G/L is also performed from the short side, which means that up is down, and down is up, in this case a performance of +3.23% on VDSI is performing a loss of -3.13% on our position.
Nice work Fred :) ,
just a thought - do you think it would be better if you change the ticker name for short positions to red ( or something different than blue ) in the portfolio list ?
Quote from: Jimbo on December 08, 2005, 02:45:05 PM
Quote from: Ramsburg on December 08, 2005, 02:30:11 PM
To identify a short trade you'll see a (S) after the ticker name, the Today's G/L is also performed from the short side, which means that up is down, and down is up, in this case a performance of +3.23% on VDSI is performing a loss of -3.13% on our position.
Nice work Fred :) ,
just a thought - do you think it would be better if you change the ticker name for short positions to red ( or something different than blue ) in the portfolio list ?
Thanks Jimbo,
Nice suggestion... done ;)
Ok I'm shorting it now. It couldn't hold earlier gains, definitely bearish.
It is very difficult to make money to short a stock for short term gains. May be day trade is OK.
But if the mm knows there are lot of new shorters, they may push the stock to much higher level.
MOVI is an example. It was pushed to sky high of $32 and squized all the shorters out before crashing it to $4.00.
I tried to short at that price level but broker did not let me short the stock, said no stock was available.
Good luck to everyone. Right now I am totally dedicating to ltrade long, short term long. Everyday, there are many candidates for stocks going long.
May be SVA, AOB are going up again.
Quote from: 1reilly on December 08, 2005, 10:23:26 AM
Morgan Stanley
I don't want to muddy this thread up with conversation about options. David surely wants this about VDSI. I'll send you a private E-mail. But for everybody don't use naked options ever. If you ever sell a call or sell a put you better have that stock in your account. Covered option trading is prudent naked option trading is crazy. JMHO
Sorry about the clutter I made too ... Let's keep it about VDSI.
Note: Know how to short or do options before actually risking money. Paper trade first to get a feel though it is quite different when risking money.
As I trade active trader - Fideilty they tell you whether there are any shares to short. There were none, but I called the help desk and they found me 2000 shares to short, of which I got off 800. The cost was $35 rather than teh usual $8 commission.
Good luck and I think as the rally did not hold, many of us had a nice opportunity to short above $10.
Anywone care to translate puenthouse msg for me - I must be thick
Sorry and thanks
Defenderyou
So now you have a short sale in your portfolio ;) Per my earlier post I have a protective buy to cover order just above the 50sma on the daily chart ($10.40 area) next question is where & why do I cover on the profiit side? Here is a weekly chart with my scenario.
Good Luck
Quote from: 1reilly on December 08, 2005, 10:06:14 AM
Many members may not be able to borrow the stock. This stock also does not have an option chain.So puts are out of the question. I know David dislikes options but it would be a way for members to participate when unable to borrow stock. I like the pick and was able to borrow the stock and do believe that shorts should be a part of this service. When you can't borrow the stock check for an option chain ,you may find a way to participate. If I see a put that makes sense to me on one of Davids picks and I am asked I will show a put and define the risks. This should only be used if you are shut out of the trade. I want to be clear here. Don't even look at the put if you can borrow the stock.
Ok 1reilly, the next time I'll look to see if the stock has an option chain, though I would avoid options. Thanks for your help if the situation arises, I traded options what, 2 or 3 times in my entire life, so I don't know much about it, those vegas, gammas and stuff, do you understand that? Thanks :)
Thanks for everybody's comments and analysis :)
QuoteLooking at a shorter time frame, perhaps there will be some rebound because the stock already had a steep decline, but longer term I think the double top will confirm itself.
I was expecting some rebound, it was great it came yesterday, because this way many of you got the chance to short this at higher prices, one of you even caught the high of the day at $10.30, congrats :D
The rally fizzled, as most rallies in bearish trends do. When a rally fails to reverse a bearish trend usually it feeds the trend and makes it able to continue. I want VDSI to go down and go down fast, I'm not playing games here, bearish moves are usually faster and steeper than bullish moves.
So I'll put in a tight stop on this short position, if the stock is set to close above $9.95 I'll buy to cover before the end of the session. For now I don't have a profit target.
Don't spread my plan across the internet, or maybe someone with more power than I will take VDSI higher just to shake me out of my short shares.
I haven't set up a short trade account (more paperwork) with Scottrade yet, though I'm tempted to bite the bullet and put it through.
Just saw an excellent short candidate based on David's success with SPEX - check this news:
Spherix's Toothy Smile
By Matthew Goldstein
Senior Writer
12/9/2005 4:13 PM EST
Click here for more stories by Matthew Goldstein
Updated from 11:09 a.m. EST
Spherix (SPEX:Nasdaq - commentary - research - Cramer's Take), the sugar-substitute maker whose stock has more than tripled this week on prolific volume, has a few cavities.
For one thing, the Maryland company bills itself as a science concern, but just about all of its $22 million in annual revenue comes from a tourist-reservation business it manages for state and national parks. It's a niche business that Spherix has managed to achieve some success in.
Selling tickets to see Old Faithful is not what got investors excited about Spherix, however. It's the company's long-held dream of finding a way to cash in on a low-calorie sugar alternative called Tagatose that's got investors frothing.
So far, Spherix has found few takers for its sugar substitute, which it has been trying to market for the past nine years under the brand name Naturlose.
Arla Foods, a Dutch company with the exclusive license to manufacture and sell Naturlose, has not generated any meaningful royalties from sales to food and beverage companies. Spherix also has made little from its attempt to market the milk byproduct as a sweetener for use in toothpaste, mouthwash and over-the-counter drugs.
There seems to be little demand for Naturlose as a food additive given the growing popularity of Johnson & Johnson's (JNJ:NYSE - commentary - research - Cramer's Take) low-calorie sugar product Splenda.
But hope springs eternal at Spherix, which believes it's on the way to getting Naturlose approved by the Food and Drug Administration as a drug to treat Type 2 diabetes.
On Dec. 6, Spherix issued a press release saying the FDA had "cleared the way" for the company to begin the final phase of clinical tests on Naturlose before seeking approval from the agency to sell it as a diabetes treatment. The company said the FDA gave the green light to begin the clinical trials following a meeting last month with several of Spherix's scientists.
The FDA, as a policy, doesn't comment on clinical trials before a drug is approved for market.
Nevertheless, the press release gave a sugar rush to Spherix's shares, sparking some frenzied trading in the normally sleepy stock with just 12 million shares outstanding. A day after the FDA announcement, more than 13 million shares of Spherix changed hands. On a good day, 50,000 shares of Spherix might be traded.
More significantly, Spherix share price took off like a rocket, rising from $1.27 a share on Monday to close at just under $5 a share on Wednesday. It fell back to $4.49 Thursday and slid again Friday, losing $1.04, or 23%, to $3.42.
Investors who binged on Spherix shares may have set themselves up for a sugar crash.
The company has lost money in each of the past three years and remains a long way from getting FDA approval for use of Naturlose as a drug. Indeed, the initial clinical trials using Naturlose as a diabetes treatment were "small" studies conducted by the University of Maryland about five years ago, Spherix said.
The early clinical trials, according to a company Web site, found that tagatose did not lead to any changes in subjects' glucose and insulin levels, and also helped with weight loss. The study concluded that tagatose, the product's scientific name, could be useful as a treatment of diabetes in conjunction with other drugs.
Of course, there's no guarantee the clinical trial will succeed when it's expanded to a much larger sampling of the population. Even Spherix acknowledges the company is a long way from getting FDA approval.
"The big hurdle is phase III," says Gilbert Levin, Spherix's chairman and chief science officer, who founded the company 38 years ago. "But getting there is no easy matter."
On Friday, a day after Levin talked to TheStreet.com, Spherix disclosed that the company's patriarch sold 62,900 shares on Dec. 7 and Dec. 8, after the announcement about the FDA meeting. The shares were sold at prices ranging from $4.60 to $4.75 a share, generating proceeds of about $289,000. After the stock sales, Levin reported owning 1.16 million shares.
So far, Levin, who owns 10% of the company's shares, is the only Spherix insider to cash in on the surge in the company' stock. Corporate insiders own about 21% of the company's shares. The other big inside shareholder is Levin's wife, Karen, who also has 10% equity interest. His wife is a director and vice president.
Levin, 80, is a big believer in Naturlose and its potential medical miracle. In 1995, when he was the company's chief executive and president, Spherix patented Tagatose as a treatment for Type 2 diabetes.
If nothing else, Levin, who turned over day-to-day control of the company earlier this year to his nephew Richard, is persistent.
To this day, he insists that an experiment he designed for use on the Viking space probe mission to Mars found signs of life on the red planet. NASA officials reject that claim, saying there was a problem with the results sent back by the unmanned spacecraft in 1976.
Levin, however, remains unmoved and believes his Mars experiment eventually will be vindicated. He says the same will happen one day with Naturlose.
"No major discovery was ever received favorably by peer review when it was made and that goes for Galileo and everyone forward," says Levin. "I'm sure it's going to be a very widely used product."
Earlier this year, Spherix suffered a setback in a clinical trial studying another potential medical use of Naturlose. Trials at the University of Maryland School of Dentistry didn't find any benefit from Naturlose in fighting the formation of plaque on teeth. The university's findings were "contrary to earlier laboratory findings by Spherix," according to the company's filings.
Investors also should bear in mind that Spherix, unlike most biotech companies that spend heavily on research and development, is a bit of a tightwad. The company reports spending just over $1 million on R&D over the past three years.
While Spherix waits for the results of the planned clinical trials, it may find itself hard-up for cash.
The company says it's facing the imminent loss of its contract to provide tourist reservation services for the National Park Service. Earlier this year, the Park Service awarded the contract, which accounts for 17% of the company's revenue, to a competitor. Spherix is protesting the decision, but says it cannot predict the outcome.
In an attempt to raise some badly needed funds, Spherix this summer turned to Cornell Capital Partners, a Jersey City, N.J., hedge fund. Over the next two years, Cornell is investing up to $4 million into the company through a financing vehicle known as a PIPE -- shorthand for private investment in public equity.
Last week, TheStreet.com reported that Cornell Capital is being investigated by securities regulators for its trading activity in shares of nine companies that it allegedly provided financing to. There's no indication that regulators are looking into the Spherix deal.
In many respects, the PIPE deal makes sense for Spherix because it provides it with a regular source of cash and because the company has few places to turn for financing. The deal is also good for Cornell because it gets to buy 2.38 million shares at a discount to their market value and can then quickly resell them.
But the flood of new stock is bad for current stockholders. In a filing discussing the deal, Spherix says its "common stock price may decrease due to the additional shares in the market."
So what we have is a Company that's main source of revenue is providing reservations for the parks dept. (and is losing that contract) that has invented a new Nutrasweet and has issued a misleading press release (Hello HYRF >:() implying it's a possible Diabetes treatment, while the whacko former CEO unloads stock during the run up.
This thing will continue falling like a rock, IMO, back below $ 1.00
Great info on SPEX KCScott :) I'm glad I took my 30% profit and run, I even sold higher than the CEO of the company lol (can you please attach this post to the SPEX thread? I think it suits fine there and I'm running out of time to send the newsletter - thanks)
Concerning VDSI, unfortunately I'm a bit late on updates to dig anything now, but the chart tells me the rebound is losing steam. Volume on Friday was quite low, as the stock yet closed below $9.95, which is now a short term resistance on close.
I don't want to give much room to this short position, because I believe this market will still edge higher. I'll keep my plan of holding shorts for as long as the stock isn't set to close above $9.95, otherwise I'll buy to cover.
I bought to cover VDSI at $10 just before yesterday's close, according to plan, taking a small loss on the first 3 SOF short trade.
The moment to be a bear has not come yet. I look to take small losses and big profits on the stocks I carefully choose, enhancing an above average return.
Been away on holiday and my stop loss / profit orders (per my previous posts in this thread) have kept me in VDSI. At a key point of support right now, interesting to see if it can hold.