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Reviewing Four Tech Stock Pins


Some stocks should still be taken seriously.

So how do those early pin thoughts look now? After all, I wrote them up yesterday. See Four Stocks to Watch for Pins.

Well Baidu (BIDU) couldn't shake 440 on Tuesday. And as we noted, there was no options reason for that, the open interest just wasn't there. And lo and behold, neither is the stock any more.

It's a good example of coincidence more than anything. The stock was just doing nothing on Tuesday, but it happened to be doing nothing right near a strike price.

It may pin somewhere, but looks like a different strike now and perhaps pinning is a misnomer as a better description is that it's just moving slowly.

November 420 calls have an open interest of 1723, that's literally a non-factor (BIDU stock has traded more than that 10 minutes into the day).

Research in Motion (RIMM)? Well, now we're on the other side of 60. Still might pin there, but this name's just really boring these days.The calls are already in the $0.30 range, so it may be akin to throwing a Pin Party and having no one show up.

Amazon (AMZN) is similar to RIMM now that it's below the 130 strike, though the premiums are more respectable and it just seems more interesting when it's an "up" stock for the most part.

And finally, Apple (AAPL). That 210 line never got in play, which highlights another point -- markets move, you never want to just play for a pin too early because you see some open interest.

It's a relatively minor force on the margins. Now that we're closer, it's the 200 line that's nearby. It has the added advantage that Apple has traded in this vicinity for some chunk of the cycle, so the options have been very much in play.

The open interest is 32,525 in the calls and 23,615 in the puts, so we do have to take this one seriously.

Just to clarify, I'm throwing these out there for informational purposes, not ever recommending going short straddles and crossing your fingers. If I ever do a specific pin play, I often wait until Friday anyway and I'm very disciplined about stopping out.
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No positions in stocks mentioned.
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