December 30, 2010 12:07 PM | 1 min read
27% profits every 20 days?
This is what Nic Chahine averages with his options 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.
Shares of small-cap Chinese capital goods company China GengSheng Minerals (AMEX: CHGS) rose more than 90% at the open today. Currently the shares are trading around 73% higher at $4.58. The activity is related to the speculative frenzy that is taking place in stocks related to rare earth minerals. It is not exactly clear how CHGS fits into this category. The company description says that China GengSheng "develops, manufactures and sells a range of mineral-based, heat-resistant products capable of withstanding high temperature, saving energy and boosting productivity in industries, such as steel and oil. Its products include refractory products, industrial ceramics, fracture proppants and fine precision abrasives." CHGS currently has a market cap of $109 million. Volume in the name has been nothing short of ridiculous on Thursday with more than 16.53 million shares already trading hands compared to a daily average of 564,000. Looking at the financials, this small-cap actually appears to be consistently profitable and revenues have been growing at a nice clip. A very cursory review suggests that going into today, CHGS may have in fact been undervalued, but today's move appears to be a bit too much.
27% profits every 20 days?
This is what Nic Chahine averages with his options 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.
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