Category: Blog
Apple & Google Pivot Points for 11.29.2012
AAPL Taking a Bite Out of Its Own Tablet Market 11.28.2012
The chart above estimates the iPad mini cannibalization scenarios from a conservative 50%, to an aggressive 70%. The cannibalization of sales could be bad news for AAPL.
According to recent data provided by ABI Research, AAPL still has a majority share of the tablet market with a 55% unit shipment. While still boasting the majority share of the tablet market, AAPL is constantly under pressure from competitors over the control of the tablet market and gave up 14% of its share this quarter, according to ABI Research.
Despite the concern of cannibalizing sales, AAPL launched the iPad mini in an effort to compete with the smaller tablets offered by ANZN and GOOG. AAPL is depending on the success of the iPad mini to gain an edge in the smaller tablet market. Apple stated that it sold 3 million tablets during the iPad mini’s debut weekend. AAPL, however, has yet to release the sales statistics for the new iPad mini.
Munster, who initially estimated that 1 to 1.5 million iPad minis were sold, now estimates 2 to 2.5 million iPad minis were sold during the official weekend launch. Mark Moskowitz, an analyst with J.P.Morgan, also believed that a majority of the sales were attributed to the iPad mini.
With a starting price of $329 dollars, the iPad mini will attract the attention of potential consumers who are set on spending less while still obtaining an AAPL product. AAPL will continue to expand into the tablet market as a means to stimulate growth and regain lost share value. AAPL is down from a September high of $702.10.
Data provided by: Tech-Thoughts ©
ABI Research
Author: Tyler Sciortino
SPY Straddle Fade and QQQ Straddle Long Since 2005 (SPY QQQ) 11.28.2012
What if one put on a pair trade? What would the results be then? Selling the aforementioned SPY straddle and buying, for example, the QQQ straddle. This is exactly what KOTM did. The thinking behind this strategy could be that SPY volatility is expensive and QQQ volatility is cheap. Another way to think about this trade could be that one is just covering their downside, for if the market crashed the short straddles will get crushed, but the long straddles will be rewarded. A risk to this strategy could be a year 2000 type scenario; where one index acts dramatically different than the other (even if we are indeed long QQQ vol, the idea of uncorrelated markets is a risk).
The results to this study were indeed very interesting. One would think, in theory, the theta (time decay) and long premium would end up being a losing trade, but it was not. The long straddles ended up adding to the net profit. The QQQ total return was a losing trade most of the time, which could be predicted. The spikes higher and lower were from crashes or spikes. The QQQ made $4.95 since Feb of 2005, in addition to the $48.72 the SPY made. The important part of this exercise is that the long straddles did offset losses during crashes.
The SPY was $116 in Feb of 2005 and is around $140 now, this trade made $48.72 points or around 42% total relative to SPY in ’05 or 35% total relative to SPY now. The QQQ made $4.95. The index was around $40 in Feb of 2005 and around $65 now; 12% total return relative to 2005 and 7.6% total return relative to now.
The trader would have to size the amount of contracts accordingly; relative to the size of both index products in order to do a proper pair trade…along with many other things. Below is a chart of the total return.
KOTM is clearly not suggesting selling an unlimited risk spread, but the data is interesting. More to come on this project.
Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…
Author
First Business Interview 11/28/2012
S&P Emini & Unusual Option Activity Video Recap 11.27.2012
S&P Emini Pivot points for 11.28.2012
Apple & Google Pivot Points for 11.28.2012
Unusual Option Activity Report 11.27.2012
Paper sold 9815 CTIC June 1 Puts for $.20 (12.8 times usual volume) when stock was trading $1.45
Paper bought 18077 IP April-Jan 39 Call Spread for $.97 (6.7 times usual volume) when stock was trading $36.59
Paper sold 4000 CAG Jan 30 Calls for $.45 (11.3 times usual volume) when stock was trading $29.56
Paper bought 7000 DNKN Dec 32.5 Calls for $.15 (10.9 times usual volume) when stock was trading $31.02
Paper sold 5550 BMC Feb 39 P, Feb 41 Call Strangle for $3.20 (9.9 times usual volume) when stock was trading $40.45
Near Term Catalysts for Anacor Pharma Should Make for Nice Upside Gain 11.27.2012
By the end of this year, Anacor plans to announce data from the phase two safety, pharmacokinetics, and efficacy study related to AN2728. AN2728 is a topical anti-inflammatory product candidate for the treatment of dermatitis and psoriasis in adolescents. The company expects to initiate phase two trials in children ages 2-11 shortly after the announcement of these results.
Dependent on positive phase two trials, the company expects to initiate a phase three trial in atopic dermatitis in mid-2013.
Also during the third quarter conference call, Anacor referred to its cash position and spoke about the offering of stock I wrote about earlier. The company believes that its existing cash, cash equivalents and short-term investments totaling approximately $36.6 million as of September 30, 2012 and the net proceeds of approximately $22.7 million from the October 2012 sale of 4,000,000 shares of the company’s common stock will be sufficient to meet its anticipated operating requirements until it files its NDA for Tavaborole in Onychomycosis. This is currently expected to occur in the middle of next year. If necessary, the company would make appropriate adjustments to its spending plan in order to ensure sufficient capital resources to complete this filing.
From the chart above, Anac has begun to trade upwards in advanced of the catalyst events mentioned here. The Relative Strength Index (RSI) is turning bullish again and volume is also picking up. The MACD Histogram also indicates this. During the recent run, we can see higher highs and high lows displayed. It’s my opinion a short term price target of $6 is on the horizon.
| Share Statistics: |
|
|
Avg Vol (3 month): |
110,415 |
|
Avg Vol (10 day): |
128,057 |
|
Shares Outstanding: |
35.57M |
|
Float: |
23.78M |
|
% Held by Insiders: |
36.49% |
|
% Held by Institutions: |
68.90% |
Shares Sold Short:
Short Positions (10/31/2012) 431,065 Shares
Change from Last -13.04%
Percent of Float 2.06%
Anac’s current price is $5.40 a share with a market cap of $192.07M.
The stock should see a move to around $6 soon. Depending on stock market conditions next year and positive results for Anac’s trials, a stock price over $10 a share is not out of the question.
By Scott Matusow
Stockmatusow.com