CNInvesting wrote:
Lumberfeverlong wrote: The shorts make it up as they go along with impunity from alleging accounting irregularities to the efficacy of donanatal. It is all BS, but the herd is getting scared and dumping their shares. This downward cycle will end once CXR posts a couple more quarters of solid earnings. Once that happens and it will, this stock will rise like a rocket. I'm sticking around for the ride up irrespective of my transitory paper losses. If you sell into this market for CXR shares, you are only helping the unscrupulous short attack mafiosos.
Here is a quick scenario in which you could have no paper losses and sleep better.
Suppose you bought 500 shares of CXR around June 15 when it was trading at about 30$ for a total of CAD 15,000$. Whether you did it to average down or not is irrelevant as this applies only to the newly bought shares.
Now, you saw like everyone how volatile the SP can be and you decide to buy a bunch of puts to protect yourself against unanticipated downside. You also don't know how the Q2 earnings will turn out and how the market will react.
Looking back at the options prices, you could have bought 500 puts ( 1 per share owned ) expiring on August 19, that's 1 full week after Q2 is released, for about CAD 1250$+fees.
Now, right now, the stock price is at CAD 22.80 $. On paper, that's (11,400$-15,000$/15,000$) or a loss of 24% ( 3,600$ ), which anybody who's been in the markets long enough can live with, true. However, thanks to the puts you bought, this paper loss is actually nullified by the appreciation in value of your options.
As of last Friday, the August 30$ put is trading for CAD 7.95$. Thus, you would have a net paper gain, (500 puts x 7.95$/put), or 3,975$-fees. So you'd bet net roughly 300 $.
Then if the earnings are good and the stock price goes up, your puts start losing in value so you resell them asap for a smaller profit before expiration and still make money ( you're selling an option to sell the stock at 30$ when the market is selling at a lower price ). And if you're lucky enough, your shares keep going up and surpass that 30$ price mark.
Anyway. Best of luck.