Trade of the Week (ARRY) 2.14.2012

The most I can lose on this trade is the amount I paid for these Calls, $.56

Reason I like this Trade: Using unusual options activity again, I noticed a customer sell June 2.5 Puts in ARRY for $.25.  I went $.30 bid on these Puts and could not get filled.  I put in a $.25 bid on the Puts this afternoon and got filled.  I want to get long ARRY with a possible POP back to $3.20, so I turned these Puts into Calls buy buying stock against them.  The Price of a Call w/o dividend or interest in Put Price and Stock Price minus Strike Price.  I paid $.25 for these  Puts and bought $2.81 stock, so $.25 + $2.81 – $2.50 gives me a $.56 Call.  This stock only has to rally back to above $3 by June in order for this Trade to be a HUGE winner.  Stay tuneds for more updates.

UPDATE 2.15.2012 These Calls are worth about $.55 and the stock have been moving less than in previous months.  Since I have until June, I will wait it out until I get an upside POP.

UPDATE 2.16.2012 The stock did rally up to $2.87 and it got me real excited, but now the stock is back down to $2.80.  Someone sold more June 2.5 Puts today for $.25 wanting to get me even more bullish and I will continue to play to the upside.

UPDATE 2.21.2012 This trade has not been a winner, but has not been a loser, but I have over 4 months until a POP in this stock so I will leave this trade on until further notice.

UPDATE 2.23.2012 With stock selling off $.04, these Calls are worth $.55.  I would rather see the stock move up and down, down and up instead of flat lining.  This is a BIG position, but I think ARRY could consoldate here then get a POP higher to $3.20

UPDATE 3.9.2012 With the stock rally higher and the options market being very illiquid, I sold stock at $2.97 and $3.07.  This is a winning trade, but nothing a winner until the position closed.  

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