Closed Off Trade On InvestTools (SWIM) CALL Options, Made Nice Profit

by Das Brain

I bought InvesTools (SWIM) CALL contracts with a strike price of $12.50 expiring January 2008, option symbol UKHAV back in mid July and since then all financial stocks in the U.S markets took a big blow to the head including InvesTools.Â The stock price dropped from about $12 down to $9.50.Â I average down my trade, as based on my research InvesTools is a solid company.Â

InvesTools (SWIM)Â has reported strong customer acquisition numbers and increased their revenue by 86% according to their last financial report. The company has an investor education division, a discount brokerage division called ThinkOrSwim.com that has a great trading platform and plus they own Prophet.net which is an amazing advance stock charting platform. My OptionsXpress.ca account actually uses Prophet.net real-time charting, it is a powerful technical analysis tool and I love it My opinion is that the stock was unfairly punished back in July, InvesTools had nothing to do with sub-prime mortgages.

Below is the chart and details of my trade:

InvestTools SWIM stock chart

DateÂ Â SymbolÂ Â Â Buy/Sell #Contracts PriceÂ Â Â TotalÂ Â Â Commiss

July 16 UKHAVÂ Â Â Â BUYÂ Â Â Â Â Â Â Â Â Â 7Â Â Â Â Â Â Â Â 1.25Â Â Â $875Â Â Â Â Â Â 32.24

July 17 UKHAVÂ Â Â Â BUYÂ Â Â Â Â Â Â Â Â Â 3Â Â Â Â Â Â Â Â 0.95Â Â Â $285Â Â Â Â Â Â 25.24

July 26 UKHAVÂ Â Â Â BUYÂ Â Â Â Â Â Â Â Â Â 3Â Â Â Â Â Â Â Â 0.80Â Â Â $240Â Â Â Â Â Â 25.24

Aug 03 UKHAVÂ Â Â Â SELLÂ Â Â Â Â Â Â Â Â 7Â Â Â Â Â Â Â Â 1.80Â Â Â $1260Â Â Â Â 32.24

Aug 06 UKHAVÂ Â Â Â SELLÂ Â Â Â Â Â Â Â Â 3Â Â Â Â Â Â Â Â 1.85Â Â Â Â $555Â Â Â Â Â 25.24

Aug 07 UKHAVÂ Â Â Â SELLÂ Â Â Â Â Â Â Â Â 3Â Â Â Â Â Â Â Â 2.35Â Â Â $705Â Â Â Â Â Â 25.24

Profit = $2520 – $1400Â - $165.44 = $954.56 USDÂ

Not bad for 3 weeks wait.

As you can see InvesTools (SWIM) stock price has shot up to a little over $13, however the stock price has hit a high of $14.Â From my chart technical analysis it looks a bit over extended and it will pull back to around $12.50.Â When it hits that level, I will re-consider buying some January CALL contracts on it again.

Please read my disclaimer.

This entry was posted on Thursday, August 9th, 2007 at 11:45 am and is filed under Option Trading. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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