I thought about it early Jan. after reading from San Jose Mercury News that VMW is the No. 4 software company, in terms of market capital (about $30 b as of yesterday). But I put down the earning date (Jan 28) on my Google Calendar (not Yahoo), and it did not send out reminder email as Yahoo does. So I missed buying the puts before earning. Interestingly, here is today’s price change of the puts options for VMW (expires Feb):
$60: $0.85 => $7.30 (up $6.45, or 759%)
$65: $1.40 => $11.00 (up $9.60, or 686%)
$70: $2.65 => $15.80 (up $13.15, or 496%)
$75: $4.30 => $20.60 (up $16.30, or 379%)
In the hindsight (I was planning to bet only $500), it appears $60 and $65 puts are more lucrative. But who would imagine the VMW stock will drop more than 30% (from $83 to $54.87) in one day? Reminds me of the Crocs…
Other puts opportunity?
I looked at other two high flying stocks: AMZN and RIMM. I felt those two are more solid than AAPL and VMW. So I would not bet on its earning (Jan 30 for AMZN, some time March for RIMM).
Amazon is benifit from the trend people inceasing shopping from Internet.
While RIMM’s 100% growth is amazing, it should slow down at some point. But I don’t know when it will grow from 100% to 50% : is it this quarter or next? Is the US business going to cut mobile devices spending as suggested by NY Times? Will the introduction of Blackberry Pearl to consumers help offset the slowdown from business side?