March 20, 2012 9:05 AM | 2 min read |
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
It was revealed on Tuesday that Amazon (NASDAQ: AMZN) will be buying warehouse automation company Kiva Systems.According to
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
, Kiva makes robots and designs software for speeding up workflow in warehouses.AMZN is aiming to use that technology to improve productivity, aiming to bring products directly to employees who can then process them faster.Rather than replace what Amazon already has, the Kiva technology will be added to the existing infrastructure.Kiva's shareholders have already approved the sale, with AMZN playing roughly $775 million for the shares. The deal is expected to close in 2Q12.The deal comes with Amazon, at the end of 2011, operating roughly 2.45 million square meters of fulfillment centers in North America, which is a 67% increase from 2010. They also operate a further 1.64 million square meters outside of the U.S., a 71% increase from the previous year.Amazon has not commented on whether the new technology will result in employee reduction, or will reduce the amount of seasonal staff the company normally brings in.In a research report published on Konday, Goldman Sachs said that Kiva develops robots that locate individual items in a warehouse and then transport them (via portable shelves) to workers who do packing and shipping. Thus the employees remain stationary on the perimeter of a facility while the system of Wi-Fi connected robots move around the interior in an optimized fashion. “With a successful acquisition, AMZN will likely roll this technology out to all of its fulfillment centers (Quidsi is already a customer) to improve efficiency and minimize headcount needed. We note that in 2011, headcount increased 67% while revenue grew 41% and fulfillment expense as a percentage of revenue increased from 8.2% at the end of 2010 to 9.2% at the end of 2011.”On Tuesday, J.P. Morgan said that Kiva could replace some picking personnel in Amazon fulfillment centers, but orders are likely to continue to require some human supervision. “We think adding Kiva's system to Amazon's FCs could increase the company's near term initial capex outlay, though we expect significant reductions in fulfillment unit costs over time given Kiva's order fulfillment rates vs. traditional technologies.”Finally, Bank of America Merrill Lynch said that Kiva's order fulfillment process uses hundreds of mobile robots to bring inventory on movable shelves directly to works, reducing the need for fulfillment workers to walk, pick and pack inventory. “According to Kiva, the elimination of fulfillment workers walking and waiting improves worker productivity 2x-4x higher than other automated systems -- Crate & Barrel achieved 6x improvement in order picking over traditional facilities.”
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.