12:40 pm (EST)   The market is higher today but the Dow isn’t showing a lot of muscle despite some good news out there today.  Normally, when IBM (IBM, $121.51, up $1.40) announces that it is doubling the size of its stock buyback program we would get a bigger pop than 57 points on the Dow.  At 9,925, the Dow is still holding the 9,900 level we talked about the other day but if you are a bull on the front line you have got to be nervous. IBM’s board approved an additional $5 billion in stock buybacks, bringing the company’s total to over $9 billion in a reflection of the company’s strong cash coffers.  The stock was trading lower for much of the morning until word hit the Street.  The stock has come off its 52-week high of $128.61 but the company remains one of the best Tech companies out there. Wynn Resorts (WYNN, $57.39, down $5.68) is down 9% despite reporting better-than-expected earnings.  The company reported earnings of $0.33 a share, versus year ago results of $0.49 a share.  Wall Street had penciled in estimates of $0.15/ share. Revenue came in at $773 million, which compares to estimates of $723 million. Revenue was helped with the opening of the Encore at Wynn Las Vegas casino resort, which debuted in December 2008.  The numbers were not included in the company’s results from the last year.  Wynn also raised $1.6 billion from an IPO on the Hong Kong Stock Exchange helping their revenue jump by 1% for the quarter. We mentioned Baidu.com (BIDU, $377.99, down $54.88) this morning before the bell and the stock opened at $355, down $77, and hit a low of $353.  We certainly didn’t expect a 13% move in the stock and we normally don’t even look at options on stocks over $200 let alone $432 which is where Baidu closed at yesterday.  However, the move was so massive we wanted to see what kind of cash option traders we taking in for the ones who bought put options on Monday. The BIDU November 350 puts (BPJWJ, $6.58, up $4.43) were going for $2.15 before the close yesterday and are up over 200%.  Wow.  With the stock at $430 on Monday these puts were $80 out-of-the-money.  If you wanted to do a strangle trade you could have went out and bought the BIDU November 510 calls (BPJKM, $0.15, down $2.85) for $3. Of course, the calls are breaking down like a rented mule but you would have made more than enough on the put options to offset the loss on the calls.  Together, the calls and puts would have cost $5.15, or $5,150 for 10 contracts of each.  If you closed both options right now you would bring in $6.58 for the put options and $0.15 for the call options for a total of $6.73, or $6,730.  That comes out to a 30% return but if the shares would not have moved 13% then you were probably looking at a small loss. One company that we are watching today is First Solar (FSLR, $151.93, down $2.94) which reports earnings on Wednesday.  The options are pricing a 15% move in the stock which means after earnings the stock could be at $125-ish or $175-ish.  We offer our thoughts on how this one can be played in the Members Area and if we were in Vegas we would lean towards the $125 level after the dust settles.  However, we also know the market can push the stock to $175 on any good news. Current subscribers, check the Members Area for the Current Trade updates and our thoughts on First Solar.]]>