Google crashing in after hours

Google's stock is crashing in after hours after reporting stellar but not stellar enough earnings. The stock was down as much as 16% in after hours trading. Currently, its down about $55. Tomorrow, several billion dollars of the American public's wealth will appear to go into thin air. However, the truth is that this money went from the public to the insiders and early investors in Google in the first two years after Google's IPO. Caveat emptor. The stock had a small move for those who bought today, however, for the people that invested in the options, tomorrow should be a profitable day for those who invested in call and put options or were bearish on the stock and only had put options.

WWWFinance - Option Valuation: Campbell R. Harvey

WWWFinance - Option Valuation: Campbell R. Harvey

Options Profit Analyzer

Options Profit Analyzer: "Options allow investors the right to buy or sell a stock at a certain price. Although they are the most risky investment vehicles available, with the potential to lose all of your capital, they can provide great returns on small investments. An option to buy a stock at a certain price is a 'call', while an option to sell a stock at a certain price is a 'put'. The specified price is the 'strike price'. Options expire on the third Friday of each month. At this time, the owner of the option can excercise the option's right or it will expire worthless. People invest in options to gain the underlying right, or they speculate on the value of the option increasing before the option expires. The value of the option depends on the price of the underlying stock, the time remaining before expiration, and market psychology. The 'intrinsic value' of the option is price difference between the strike price and the underlying stock's price. An option to buy a stock at $40 when the stock is trading at $45 would have an intrinsic price value of $5. The 'premium' of the option is the price above its intrinsic value. The premium is directly related to the time remaining before expiration. An option is worth more with plenty of time before expiration, and its premium decreases as the option expiration date approaches. Market psychology can also increase the premium of an option. Stocks with bullish sentiment can carry higher premiums on call options at any price above the current stock's price. Premiums are a market driven value.
The significant risk of options is that they can become worthless if they expire 'out of the money'. An option to buy a stock at $50 when the stock is trading at $45 would be worthless upon expiration. All of an initial investment can be lost.
Options Profit Analyzer is a calculator based only on the option's intrinsic value. It does not factor in premium costs since premium is determined by the people of the market. The profit is based on a person buying an option at low price and selling it at a higher price before the option expires. Options are sold in contracts, with each contract representing 100 options. Here's how the Options Profit Analyzer works. This calculator can calculate for puts and calls. To calculate profits for a call option, place a higher expected stock price than the strike price. To calculate profits for a put option, place a lower expected stock price than the strike price. "

'India Everywhere' in the Alps - New York Times

'India Everywhere' in the Alps - New York Times: "The question is whether India's unspoken message - that it is another China - is credible. After all, China still grows faster than India, has attracted 10 times the foreign direct investment and has built a gleaming network of airports and highways that make India look ramshackle."

Great trade on Google's drop

A put option to sell Google shares at 420 was available for a nickel prior to Friday, January 20, 2006. On that day, GOOG dropped from 440 to 400. So, to put this in perspective, one could have bought ten contracts representing 1000 shares for $50. By the end of the day, the value of each of those options was worth at least $20, since the stock had sunk to $399. The value of those ten contracts for the right to sell 1000 shares of Google at 420 went from $50 to $20,000.

Light Reading - VOIP - Google Is Overvalued - Telecom

Light Reading - VOIP - Google Is Overvalued - Telecom: "Google's current valuation - about $130 billion - assumes hypergrowth of both revenue and profits for many years into the future (62% compound annual growth rate to January, 2011, by my calculations). "

A great technical article about Google's current and future valuation.

10 Hot Techs That Aren't Apple or Google

10 Hot Techs That Aren't Apple or Google
Great article about tech stocks that are poised to move up.

TXN trading range

TXN is moving between 31 and 34. It's a good opportunity to make a short term ten percent gain or to make bigger profits with a call option at 30 or 35. The resistance level around the high 34s will take a while to break. Analysts price estimates are around 37. Positive news from TXN or an analyst upgrade would move the stock upward; otherwise, the stock doesn't appear to be able to reach higher levels by trading alone. Another factor holding the stock back is the reelback in the market recently. The price of Texas Instruments has also dipped below the 50 day movig average for the first time in two months.

thinkorswim Home - Stock Option Investing - Stock Option Trading - Online Trading Stocks and Options

thinkorswim Home - Stock Option Investing - Stock Option Trading - Online Trading Stocks and Options

Dueling Fools: Options Bull [Fool.com: Commentary] January 12, 2006

Dueling Fools: Options Bull [Fool.com: Commentary] January 12, 2006: "'Options don't lose people money. People lose people money.'"

CSCO moving up to 20

Cisco has been moving up well from 17.50 this past week based on positive analyst sentiments. The stock looks like it will reach 20 by next week. A call option on CSCO at 17.50 would profit nicely from the current small move from 18.97 to 20.

Google - Week in Review - New York Times

Google - Week in Review - New York Times