Chungst

Friday's Options Report: CFC, NMX, CPRT, AIG, CSCO, INTU, SWIM, MNST, JAVA, MSFT

To User 187558, for options traders (and stock investors alike), the writer is giving "color" as to why these stocks and options had such high level of activity on a relative and absolute basis, respectively. We will never know the complete reasons why suddenly so many options were traded for XYZ stock, but being aware that such movement has taken place gives us readers an opportunity to see the writer's explanation of why these trades were being made based on the particular options bought and sold. That is to say I don't necessary agree with the writer's assertions, but I appreciate the "color" and the update on these sizeable moves.

For SWIM, it recently announced that the SEC began an inquiry. In its form 8-k filing, SWIM stated:
"The Company is cooperating with a non-public, informal inquiry by the U.S. Securities and Exchange Commission ("SEC") relating to representations by certain presenters in certain portions of their presentations at some of the Company's seminars. The Company has been cooperating with and intends to continue to cooperate with the SEC. Because it is ongoing, the Company cannot predict the outcome of this informal inquiry at this time, and, as a result, no conclusion can be reached as to what impact, if any, this inquiry may have on the Company or its operations."

From my personal experience (at a paid seminar) -- SWIM put on a "full court press" (this is my opinion) to get people to buy more expensive courses -- their PHD course had a list price as much as $35,362 but was being discounted to $23,999 at the seminar good for two people. The upsell was unbelievable (again, my opinion) and continued one more time even after the formal seminar was over! It was supposed to be a 2-day seminar on learning their famed "3-green arrow system" and boy, did the instructor talk about options and 'complex' option-strategies (like an iron condor, a four-legged trade, that were beyond the scope of the basic stock course) and asserted numerous questionable investment strategies / results. I am not surprise by the SEC inquiry especially since SWIM members constantly "brag" (again, my opinion) how they can make "4% a month" on SWIM's dedicated message boards for paid subscribers. I understand GIPS and have worked in performance attribution so I know how difficult it is for a portfolio or a composite to each at a rate of 4% a month.

This was a self-inflicted injury for SWIM. Notwithstanding my aforementioned comments, SWIM does have a real franchise like "Toolbox" and "Prophet" with recurring income streams and a highly ranked options firms called ThinkorSwim that is gaining accounts. In fact, SWIM reported a profit for its recent fiscal quarter.

Cheers.