Throwing darts at the board to find shorts!!!

 Not really, but I want to short every stock, except for those with earnings due in the next 3 sessions. Back in October every stock was oversold. Now, every stock is overbought. I see too many stocks for which I can sell the bear call spreads, and finding it hard to choose from.

 For the Feb options cycle, I am selling bear call spreads for the following:

LinkedIn (LNKD): I lucked out, in liquidating my puts before earnings, but I will be a bear on this stock, until it gets below $60. I am selling $87.50 calls for Feb and buying $92.50 calls for a credit of $1.40.

Regeneron Pharmaceuticals (REGN): Sure enough the best estimates for sale of Eylea have doubled from $160 million to $300 million, but it is ridiculous that stock has doubled in the last 40 days, raising the market cap by $5 billion. I am selling $110 Feb calls and buying $120 calls for a credit of $2.80.

Intuitive Surgical (ISRG): I love this stock, but it has gained almost 15 %( more than $60) in last 2 weeks. I am only betting that its rise will stall for the next few days, 3 days to be more precise. I am selling $515 Feb calls and buying $525 calls for a credit of $2.30.

 With only 3 days left in this options cycle, I feel the best way to trade is to sell bear call spreads, for that stocks that had extraordinary runs.

February, 2012 option trades for NFLX and LNKD

  Looks like, I got off the train too early. I wish, I held my bullish portfolio for few more days than I did. Markets seem to be jubilant this morning, with good news from all sides. They have come a long way, in last three months. Stocks are not cheap any more and in most cases, reached the price targets for the year. It makes more sense to be a bear now. I will remain bearish on the markets until there is a 3 to 5% correction.

    For February options cycle, I am placing bearish trades on Netflix (NFLX) and LinkedIn (LNKD).

Netflix: There was no reason to celebrate the 600000 new subscribers added by the company in last quarter, especially after the company lowered its forward earnings. It only makes sense, to use a free subscription offered by NFLX for a month during holidays. NFLX was the most hyped company and now a broken one. It is only a matter of time before Amazon starts subscription streaming with its cloud and Kindle fire, and do it more efficiently.

  NFLX has almost doubled from its November bottom and trading today at $126. Price targets range from $90 to $110. Stock is due for a pull back and also faces resistance at $130. I am selling credit spread by buying February $140 calls and selling $130 calls. Net credit for the spread is $2.40. If the trade moves against me, I could have a max loss of $7.60. It seems stupid, to risk $7.60 for $2.40, but it makes sense to me today.

LinkedIn: This is probably the most overpriced stock in the continent, trading at 140 times forward earning. It’s almost a gift that stock has gained $8 in two days. Stock is trading today above $80. I am buying a put spread by buying February, $77.50 calls and selling $70 calls for net debit of $1.90. My max loss will be $1.90 and max profit will be $5.60.  Earnings are due on February 9^th. Stock had an excellent run and I don’t see upside potential even if there is a positive earnings surprise. Stock is in a down ward channel and has reached the resistance line.

                                      Chart courtesy: Finviz.com