rwollney1

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    • Thu Jul 24th 08:47 AM | Rating: 0 0
      Commented on:
      Amazon Tops Estimates, But Did It Really Beat?
      Did the stock really trade down to 69.15? It looks to be around 76.50 in pre opening trading.

      Thanks
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    • Fri Jul 4th 12:05 PM | Rating: 0 0
      Commented on:
      Another Macroshares Oil Arbitrage Opportunity
      I don't know if this hedge has any merit or not.

      What I do know is that it is not an arbitrage.

      An arbitrage is the simultaneous buying and selling of the same security or commodity in different markets to make an immediate, RISKLESS profit.

      "However, I only took advantage of it in a small way because this is by no means a RISK FREE trade.

      That statement should automatically tell you this is not an arbitrage.

      To use arbitrage to describe this trade is an oxymoron.

      It is at best a hedge.
      View article »
    • Tue Sep 11th 13:02 PM | Rating: 0 0
      Commented on:
      Countrywide CEO Gets Lucky Grantitis
      The author of this article is absolutely correct. It is beyond naive to think that Mozil could have been granted the options at the low of the stock simply by coincidence.
      It is also naive to think that the SEC is in the business of protecting the public investor.
      View article »
    • Thu Aug 2nd 13:06 PM | Rating: 0 0
      Commented on:
      Options Ideas for This Volatile Market: EMC and Private Equity Players
      You don't mention which calls or puts you recommend buying. I would not recommend buying any options in any of these stocks, as the implied volatility is far greater then the historical volatility in every one of them.
      To recommend buying options that are extremely overpriced relative to their theoretical vallue is bad advice.
      Ray Wollney
      optionspros.com
      View article »
    • Thu Aug 2nd 13:06 PM | Rating: 0 0
      Commented on:
      Options Ideas for This Volatile Market: EMC and Private Equity Players
      You don't mention which calls or puts you recommend buying. I would not recommend buying any options in any of these stocks, as the implied volatility is far greater then the historical volatility in every one of them.
      To recommend buying options that are extremely overpriced relative to their theoretical vallue is bad advice.
      Ray Wollney
      optionspros.com
      View article »
    • Wed Jul 25th 13:16 PM | Rating: 0 0
      Commented on:
      Using Options To 'Strangle' Apple, Research in Motion
      He's not buying a straddle, he's buying a strangle. To be precise he's buying the Aug. 140 call and the

      Aug. 130 put. However, John, you are precisely correct when you say the options from a theoretical

      standpoint are overpriced.


      The implied volatility on the strangle is approximately .55 when the historical volatility is much less.

      Probably around .35 or so. Therefore the odds are in fact stacked against him. The strangle is probably

      a sale not a buy. However strange things do happen and even though it's a bad bet he could get lucky.

      Ray Wollney
      optionspros.com
      View article »
    • Tue Jun 12th 21:48 PM | Rating: 0 0
      Commented on:
      Are Share Buybacks Actually Good For Investors?
      It depends on the reason for the buy back.

      If a company is buying back the stock that reduces the share count that benefits the shareholders.

      However if a company is buying back shares that it issued to it's executives and employees due to the exercising of employee stock options (ESOs), at lower prices than the company is paying to buy the shares back, then that is not beneficial to shareholders. Quite to the contrary. In other words if the executive or employee was granted ESOs to buy the stock at say 20 and the stock rises to say 40 and he exercises the options and the company wants to avoid dilution so it buys the stock back at 40 this is not good for shareholders.

      According to Albert Meyer a CPA and former accounting professor and the head of Bastiat Capital the difference between 20 that the company was obligated to sell the stock for and the 40 it paid to get it back is in reality a deferred compensation expense.

      A good example of this according to Mr. Meyer is Dell which had a net income of 19 billion over the past ten years. However shareholder equity only increased by 3 billion. What happened to the other 16 billion? It was spent buying the stock back that it had issued to executives and employees. This was cash out the window.

      I would suggest that anyone interested in this subject to go to google and look up Albert Meyer interview-Bastiat Capital. It is quite revealing
      View article »
    • Sat Jun 2nd 11:04 AM | Rating: 0 0
      Commented on:
      How Steve Jobs Lost Over $4 Billion
      Bruce,

      Thank you very much for your comment.

      Ray Wollney
      View article »
    • Thu May 31st 21:14 PM | Rating: 0 0
      Commented on:
      How Steve Jobs Lost Over $4 Billion
      Thank you all for your comments. I had no idea my article would stir up so much passion. I would like to say that my article in no way is attacking Mr. Jobs or his ability to run his company. I'm sure he is a top notch CEO.
      However if he had not made the decision that he made and exchanged the ESOs for the restricted stock he would have made well over 5 billion at this time instead of just over 1 billion. It turns out that he possibly was a better CEO than he even thought. He obviously had no idea the stock would soar the way it has. If he had it certainly seems to me that he would not have made the trade.
      I don't think he ever dreamed that the post split ESOs exercisable at 21.80 would ever be "in the money".
      Certainly not a 100 points "in the money" which at one time today they would have been. So whether he needs the money or wants the money is irrelevant to the fact that this is the most expensive options trade ever made.
      Ray Wollney
      View article »
    • Tue May 8th 17:53 PM | Rating: 0 0
      Commented on:
      Using Options to Capture Dendreon's Volatility
      Christian, thank you for your comment
      I agree that the potential for a big move is there. This is why the implied volatility in the May options is so high. In anticipation of the FDA ruling the May "at the money" and slightly "in the money" calls and puts have been bid up to extremely high prices. Since I wrote the above article the implied volatility in these options has risen even more.
      I'm not sure what you mean when you say the straddle is a low risk option. Buying or selling the straddle is a high risk option. This is not for risk averse.
      As for the large short interest no one knows if most of that is naked shorts or shorts tied to options in some way ie a reverse conversion. So I'm not convinced that the short interest is a big deal. Also the if the FDA rules against Provenge then the stock will surely go down which would not restult in a short squeeze.
      The question here is whether the straddle is a buy or a sale. We'll have to wait and see.
      Thanks,
      Ray Wollney
      View article »
    • Wed Apr 25th 19:58 PM | Rating: 0 0
      Commented on:
      Google Employee Stock Options: The Sequel
      No it doesn't make your conclusion "simply incorrect" and I certainly did not intend to offend you by that comment. However to compare google or practically any other individual stock to the broad based indexes such as the S&P 500 is like comparing apples and oranges. The SPX, OEX, DJX or any other broad based index have always traded on a much lower volatility than almost all individual stocks. An exception of course was the 87' crash.
      My point is that a stock that trades on a volatility of .30 or lower comparatively speaking in my opinion is not that volatile.
      You are right when say that this has been a period of low market volatility. It has been low for quite sometime now. That's probably part of the reason why google is not as volatile as it once was. (like many other stocks).
      However the stock market in general and individual stocks in particular have had periods of extraordinarily high volatility. And the potential for a volatility "shock" is always there. In fact it is inevitable. When is anybody's guess. But it will happen again. That's the nature of the "beast". So when the volatility in google gets to above .40 I will agree that it is a relatively high volatility stock.
      As of today's close (4/26) the implied volatility in the at the money calls and puts in the front month (May) is around .21. Is that a high implied volatility. The answer is no.
      Perhaps now is the time to buy the premium in those options. The at the money calls and puts are trading cheap or underpriced if you use a .30. In fact they are very cheap. Not to mention the out of the money put and call verticals which are even cheaper. I actually bought a few today because of that reason. I do think an implied volatility in google of .21 is extremely low.
      So when the "beast" raises it's ugly head again then I will agree with you.
      Thanks
      View article »
    • Fri Apr 20th 20:42 PM | Rating: 0 0
      Commented on:
      Google Employee Stock Options: The Sequel
      I have read both of your articles and although I agree with most of what you say there a few points that I have a problem with. One is the price the bidders will pay is crucial to determining what the employee receives for the already discounted TSOs he or she is selling. Obviously the bidders are going to pay less than the "fair value". How much less is anybody's guess but they will low balling as much as they can get away with.
      Also I don't think TSOs will increase employee retention as being able to sell their TSOs early, even though it may be a small fraction of it's "fair value", might make an employee more apt to leave early as well and look for employment elsewhere where or she might get more ESOs or TSOs from his or her new employer. Unless of course he or she had a reload provision which is highly unlikelly as reloads are usually only available to highe level executives.
      I also do not consider Google to be a highly volatile stock. With the implied volatility in the Jan. 09 at the money calls being .28 that to me is not a high volatility. This can be demonstrated with the price action today. The earnings came out and were spectacular according to a lot of analysts. However the stock closed up only 10.83 or slightly more than 2% from yesterday's close. The volatillity in Google is less than GM and much less than Ford which has an implied volatility in the Jan. 09 options of around .45. So to say Google is a highly volatile is simply incorrect. It was in the past but is no longer. That could change of course but who knows? The point is with the implied volatililty at .28 the market is saying that Google is not that volatile. More volatile than GE or Mo, yes. But much less volatile than countless other stocks.
      These are probably minor points as both of your articles on the Google TSOs are quite revealing.
      View article »
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