Sorry for the tardiness on this note.  I had an obligation today that kept me away from the computer until now. Better late than never.

RIMM delivered $.72 per share in earnings, one penny above analysts estimates. It was a great quarter, and the company doubled from the same quarter the previous year all across the board.

The stock popped in after hours trading a couple of points- it traded to a high of $122 and the last trade was $121.50. This is a heaven sent situation for a lower risk trade.

I hope the stock holds up in the $122 range for the first half hour tomorrow morning. I will be in front of my computer buying puts or shorting the stock.

The financial performance was great, but not great enough to push this stock higher.

All the hot money will come screaming out as soon as the stock shows some signs of weakness, and it will probably give back at least half of the $100 to $120 move of the last several days.

In short, these numbers were already priced into the stock before they came out, and the hot, short term money will start taking profits in earnest in the next day or two.

The ideal situation would be for the stock to trade up another point or two early in the AM, then syonara RIMM for now. Over the longer term, I’d rather be short than long. However, not tomorrow.

On RIMM- it is 50 minutes before the close, and the stock is falling apart- $115 as I write this. I am not up nicely- about $2k- going to lock in half my profits sometime before the close.

The die is cast for me on RIMM- I’m taking my shot by putting about $9k at risk with 10 April 120 puts at $8.90.

I’ll hold these into the close unless they go a lot higher, and find out what the numbers are post close. Everything I’ve read suggests the stock is going to $130 on good numbers. Usually, when everyone is saying one thing, the opposite actually happens.

As I said, if the numbers blow away even the whisper number, and the stock trades way up, I will buy more puts tomorrow morning when I believe there is some sort of peak.

If there is anything the market doesn’t like, the stock should get killed the way it has run into earnings.

It’s risky, and counter intuitive. Keeping my fingers crossed. I haven’t invested more than I can afford to lose.

For those of you who are watching the stock come back down now- you might want to cover half your short before the close today if you have a nice profit

I will be out of the office just after today’s close, so I won’t be able to post any commentary until later this evening.

I closed out the SPY trade to early, and left 2 points on the table. Not perfect, but a wise man once said I would rather be out wishing I was in. In this market, tomorrow is really another day.

And, speaking of another day, I am contemplating getting short RIMM into tomorrow’s post close earnings release.

This is a dangerous trade. RIMM has been making a lot of noise of late about how great their sales are, but the fact that the market already expects the sales to be great suggests it is already “baked into the cake” through the share price.

A quick look at the last quarterly release suggests the trade could be foolhardy. Q3 numbers came out post close 12/20, and the stock, which had closed at $105, reopened at $122- a huge gap. If you were short, you were killed.
However, on the positive side, there are a couple of big differences. Most importantly, RIMM was not trading up into the earnings release last quarter. It was flat at about $100 for the previous 3 weeks- the numbers were a big surprise to the market.

Secondly, within a week of the $122 gap, the stock was crashing back down through $100 and ended up going down to $80.

This is too good to resist for me. Ideally, I would like to see the stock up above $118 to enter the trade. However, I am going to take a small position through a put before the earnings release. If the stock gaps up big, I will double up. If the stock falls apart, I will make what I make.

I’m looking at the April 120 puts (RUL.PD)- the are trading at an obscene premium of $9- I’ll probably buy 5 of them- about a $4500 investment, and double or triple up if the stock gaps up on Thursday morning.

Will post a BLOG when I make a trade. Would love to see the stock above $118.

Update: I’ve waded in and bought 10 April 120 PUTS at $8.90 for a total investment of $8900. Looking to add to position under a couple of different scenarios.

There market liked numbers on the economy this morning, and gapped open. As such, I locked in my profits on Friday’s SPY trade. Sold at 134.29 for a net profit of $2230 in two trading days on 1,000 SPY. Just as I suggested- happy to scalp a couple of grand and move on. Now- on to thinking about RIMM.