Groupon(GRPN)

[doctrine]

Good luck on the short. I suspect it will work out well for you.

[avrex]

yikes. You both shorted grpn *and* you bought weekly puts the week prior to earnings ??
talk about a monodirectional bet.

I guess I should clarify.

I actually don't 'short' any stocks as I don't like idea of declaring any gains/losses as income, for taxation purposes. I only want capital gains.

Since most people on the forum don't utilize options, I often just use the term 'short' to indicate to them my monodirectional bias, towards the negative, in the underlying security. So, when I say that I have 'shorted' a security , my actual position is either a Long Put option or a Short Call option.

In the case of GRPN, I did buy Long Puts.

[buhhy]

Hmm, I think I might take a stab at GRPN puts as well what strike and expiry are you going for?

[avrex]

I've done a lot of options over the last 8 months. Today (Friday), I bought my first 'weekly' option. Ya, they actually have those.

I bought 8 GRPN Feb 10th $24 Puts @ $1.55

Will the euphoria of the announcement of the Facebook IPO, take GRPN and other internet stocks even higher next week?

or will Groupon's earnings report on Wed Feb 08, bring us back to reality and take the GRPN price down a notch?

I'm hoping the latter.

buhhy, carefully think it over.
I do occassionally make these high risk moves. Mr. Market doesn't always agree with me.
By the end of Wed, I may very well have lost $1,240.

[PMREdmonton]

The thing that I worry about with buying GRPN puts is that so long as revenues are still growing well (and they were at the last earnings report) the market will accept mildly negative earnings so long as the degree of loss is lessening.

I do agree that in the long-run Mr. Market will crush this stock but I do not think that day is next week

I would like to see them miss once then see the stock bounce and then buy in and watch them get crushed.

[buhhy]

The thing that I worry about with buying GRPN puts is that so long as revenues are still growing well (and they were at the last earnings report) the market will accept mildly negative earnings so long as the degree of loss is lessening.

I do agree that in the long-run Mr. Market will crush this stock but I do not think that day is next week

I would like to see them miss once then see the stock bounce and then buy in and watch them get crushed.

Yeah, that's what will probably dissuade me from buying in. GRPN will probably do well with they can improve their margins or reduce their net loss. But if they miss, I feel they'll take a huge plunge. Definitely think GRPN is done in the long term. Too many bad things about this company.

Hmm... decisions decisions...

[Argonaut]

I'm a bit gun-shy.. there's some decent news out there for Groupon ahead of earnings.

http://www.reuters.com/article/2011/...7B00RM20111201

The $500-$700 I'll spend on puts is not that big of deal.. but it would adversely affect my performance numbers if I miss. I'll think about it. Leaning towards yes.

[Argonaut]

I bought 3 GRPN puts and hedged it by buying 100 shares. 3:1 ratio to the downside looks good so far.

[ddkay]

Buying this dip tomorrow, stocks always trade more volatile post-earnings in afterhours, I think it could shrug this off by the end of the week

[Causalien]

Congrats on Avrex and Argo. I wish I have the dry powder to do this trade, but my money is tied up in some other risky trade. I am puzzled though because I don't understand why you guys didn't wait until before today's market close to buy the puts. The time decay on weeklys are extreme.