June 8, 2012 4:04 PM | 1 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.
Mattress and pillow producer Tempur-Pedic (NYSE: TPX) confirmed this morning that it has been repurchasing shares in the open market, restoring confidence in the company following disappointing management guidance revisions this past Wednesday, June 6.Shares of Tempur-Pedic rose steadily today, climbing more than 14%. This followed a decline of more than 45% on June 6.Share repurchases are often seen as a sign that members of management believe their company is undervalued. If Tempur-Pedic's valuation later rises, the company could achieve profits from its repurchases.Since an information asymmetry exists between investors and management, investors might see share repurchases as a positive signal by members of management, implying that they have a positive outlook on the company. Thus, investors might view repurchases as an occasion to purchase shares themselves.Mattress producer Sealy (NYSE: ZZ) traded lower today, closing down around 2 cents or 1.2%.
Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.
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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.