By Sell Puts
The late session sell off today was a little out of left field, with the Nasdaq leading the way. Interestingly enough (NASDAQ: RIMM) happened to be reporting after the bell. I wonder if some information around the number was leaded around 2 pm est. You can really see the Q's come off the days high of 2,415.42 at 2:06 est. At that point RIMM is already starting its march downward as ETFs pull on her. AT 2:38 est the Q's really fall off a cliff as the bid fails around 2,413.54, fairly heavy selling remained until the closing minutes. This seems perfectly normal right?
Well yes if you do not take into account RIMM reporting. There was a bit a buying into the close, though minutes after the bell there is a tick up in RIMM shares, up to the blue trendline before the number. As the number came out RIMM sold clear down to 66$, hell of a trade if you were in it. Fast fingers! Here is a quick summary of the numbers:
According to Susan Taylor at Reuters
"They had this business to themselves for years. Now everybody's joined the party. The U.S. is probably tough for them now," said Snyder, referring to increased competition in the United States.
RIM's profit rose to $710.1 million, or $1.27 a share, in the three months ended February 27, from $628.4 million, or $1.10, in the same period last year.
Revenue increased 18 percent to $4.08 billion."
The results lagged analyst expectations for a profit of $1.28 a share and revenue of $4.3 billion, according to Thomson Reuters I/B/E/S.
My take is the Q's were sold off ahead of tomorrow i hopes to cushion any selling tomorrow at the open related to RIMM's numbers. Less shares will be needed to be sold at the open tomorrow, now the have a better chance of moving higher ahead of Thursday and Friday's (market closed) economic numbers. Trading trickery at its finest. RIMM may retrace much of today's move if the conference call helps ease some fears, i would not be surprised if this happens. Much of the options activity was neutral, strangles seems to be the most popular trade.
