Last week I bought some Sep $10 calls on Gigamedia GIGM ahead of todays earnings release. The earning came out OK and the stock went to $12+ and I sold my calls for $2.55 this morning. Nice to make a little money in this market.
Trade King online brokerage has added the services of MarketGrader.com to its stock reporting services.
It looks like a service to give a quick useful snapshot of a company you are interested in.
Since February I have owned and written calls on Gigamedia GIGM. Recently the stock has taken a serious tumble, losing about 1/3 of its value. This is a very profitable and growing company and I see no reason for the price fall except market fears and the current pull back in both the U.S. and Taiwan markets.
The company has an earnings release scheduled for next Tuesday, August 14. Today I bought some Sept $10 calls for $.95. An earnings surprise to the upside should give a nice boost to the stock price.
Projected earnings are $14 per share for the 2nd quarter. Last year the company earned $.18 in the second quarter, while projections then were only a nickel.
For a profitable growing company the stock price of Gigamedia has taken way too much abuse. IMO!
In my opinion, markets like this are especially hard on covered call writers. The covered call writing strategy works best in flat or slowly rising markets. Rapidly falling stock prices have the covered call writer replacing expired positions with lower strike prices, often below the original stock purchase price, trying to recover lost ground.
I did exactly that today, I wrote an August $12.50 call on my position in GIGM for $.45. I had originally purchased the stock in May for $14.54 and sold the July $15 call. The share price has been on a serious slide and is trading at about $11.40 today.
I still believe this company is an excellent prospect for growth and expect the shares to trade in the $18 to $20 range soon. (One year maybe!?). Now I want to earn some option income and try to avoid having it called away before a nice run up. Time will tell.
I have started another blog on investing called Investing Ideas.
The idea is to discuss a range of investment ideas and link to good ideas from other blogs/sites.
It has just started so check back occasionally to see how it goes. I plan to continue posting here as well. Thanks.