Earnings Report play for the week $DDD

This was a spread option trade.

In order to create a spread you are buying one option strike and selling the other. The difference between them is the spread. It reduces risk as it reduces the amount of capital in the trade.

The last few months I have been immersed in the crytpo-verse with mining, trading, running masternodes and buying ICOs. I will update those going forward through this site and youtube as we go into the 3rd month of 2018. Took a short break from the intangible world to get short on stock as a help for a member with their entry and exits on shorts. $ZSAN was the target. Here is the trade Osirustwits™ AT (@Osirustwits) tweeted at 7:13 AM - 27 Feb 2018 :

Took a break from #Crypto with the @Ascend_Trading #TheDarkArmy to help a member who was having issues with short entries & exits. Did a live trade walk through on $ZSAN if you want to learn to trade #Charts on #Crypto #Stocks literally anything join in https://t.co/Zerbd0nh7G https://t.co/55kgo9j1ZD (http://twitter.com/Osirustwits/status/968504481599012864?s=17)

A gift to my loyal readers and followers

Welcome all it has been New York minute since I posted last on this blog ever since going to the Ascend Trading chatroom found here http://www.ascendtrading.net?aff=osirustwits to bring a blast from the past and our fundamental short on Intercept Pharmaceuticals Inc $ICPT back to the spotlight as we close it out down $21.52 at $91 from a high of $112.52 or 19%

If you remember the value of the stock was pegged at $91.44 to $96.01 and when we got the run up on "buyout" rumours I had to comment and we begun stalking this great short.

So as a reward to all my loyal 5500+ followers on twitter @osirustwits and Stocktwits @osirustwits offering a free trial of the room where we have been not so quietly shorting the market.

Come join me and #TheDarkArmy on the ruby trial  http://www.ascendtrading.net?aff=osirustwits 

Like share and message me your thoughts on my twitter @osirustwits and about the trial   http://www.ascendtrading.net?aff=osirustwits  found here to Ascend trading

What is a short squeeze?

Been a while since I posted and many have asked about what is a short squeeze so I decided to do a blog entry to make it easier to explain how these work.

What is a short squeeze?

A short squeeze occurs when a stock that is shorted has its price start to rise quickly, this make shorts close their position or face larger loses.  This is because traders who short also known as shorters only profit if the stock price drops.

Now a shorter's losses are the short squeezer's gains, because the short squeezer is able to force the price to rise, buying into the stock and selling as it peaks higher and higher which drives the cover price up. Straightforward and simple but why doesn't it always work?

A short squeeze is not without risk it requires all buyers to sell on the ask or higher this will drive the price up as shorts clamber to cover.

Why this fails is because shorts will try to dive the bid with sells to try to scare longs into selling. If longs bail early by dumping the bid it craters the stock and shorts get out of a trap. Shorts can only borrow so many shares of a company that is the short interest percent once there are no more borrows they can no longer sell the bid. These crowded shorts happen often in low float stocks with an already higher than normal short float.

Supply and demand shortage is what fuels this.

What to look for as a short squeeze candidate?

Short interest sometimes the higher the better. It is the number of available shares that have been borrowed and sold short. I look for over 10%

Days to cover this is a key factor because if the volume is low this will raise the price parabolic so the higher the number of days the better.

Stocks that have a known history of spikes these are usually stocks shorts have been squeezed on before.

Recent news or a promotion. News could be anything from a company press release, a SEC filing within the last week to 2 max or even another company in the sector. A current promotion of the company whether paid or uncompensated. While news has a stronger weight a promotion can also move the stock parabolic.

Price point of the short. This was exemplified when an entire chat went short Resolute Energy Corporation ($REN) at $16. That was the intraday support thus many closed their short and flipped long to create a squeeze on that group which topped out at $23 over several days and now the stock is over $32 time of posting 100% price increase.

That was a successful squeeze.

REN Pump Confirmed via Northland Securities

Not going to waste your time or mine going into a big I knew this told you so just a matter of time speech. Just going to be short and simple REN Resolute Energy Corporation ticker $REN has been confirmed as a pump by at least Northland Securities who issued a price target of $35 on the high only thing bulls see and $12 on the low.

https://twitter.com/MintCapital3/status/773191776270245890

 Good luck trading this long or short get protection

My Game Plan (MGP) for shorting $REN Resolute Energy Corporation

Resolute Energy Corporation (REN)

Why the short position is a no brainer?

First off let me start by saying had I known the stock would move as much as it did up I would have taken shares long first to use that profit in the short back down. I call this a #TarzanTrade such as with $CORI

 I expected an up move but not a 30% jump otherwise I would have been long first.
Look it up on Twitter I coined the phrase #TarzanTrade and pretty much only one who has used it for trading both directions around a pivot. Usually up first then down

Before I start to get into this trade and in the manner of full transparency I am currently short $REN as a swing, I have been shorting it daily from last week as a daytrade due to this ticker being up on no real strength other than just a bad short entry and the squeeze. https://twitter.com/Osirustwits/status/769168758854209537

this is not a typical post about the company or the ticker. This post is about how I am now trading it because I see too many who have gone forward and followed others or a GURU which is something I never claim to be and are now drowning or worse covered for 4 digit loses. Reading 1 guy has blown up 97% of his account hurts. I was once in those shoes but I have evolved and adapted as a trader now. Hopefully this will help you too.

5 rules to shorting a stock

1) Are you shorting the chart or shorting the company. 2 different trades know which you are doing don't confuse them

2) Know your risk a tech short should never be more than 10% your capital to start never more than 33% ever

3) Never let your risk move over your reward that ratio is key for being profitable

4) Does the company have any options if so yes watch them if not watch volume.

5) Never short before the first red day as the next day gives you a pop to short but also gives you a clue for the trend change.

6) Stick to your plan of risk reward and put the emotions away money has no feelings and no loyalties.

On Sept 2nd 2016 I entered a swing short on the fundamentals and the over extension of the chart I announced I would do this the day prior. https://twitter.com/Osirustwits/status/771464873716744192

I had no borrows the 2 days prior thus no trade (hindsight that was a blessing).

Now brings the reason for this post too many don't understand what the term protection and having a stop in mind are.

The stop is to limit the amount of loss you can take if a trade is going in the wrong direction. Too many are just adding and not taking size back off in the drop in fact they are adding at the bottom of the drop and not the top. In fact an entire chart is rumoured to have shorted the $15 break and the price action and this post would lend the strength to that http://stocktwits.com/message/61397722 

  (but what do I know "Elitedaytrader" AKA Luke Murray by some said I am a twit the squeeze was already done.)

This mindset is bad very very bad as each time you add to your short or cover you are borrowing or repaying your borrow on shares. How do you do this? You exchange money for shares yes you give those bulls more cash aka ammo. This is the opposite side of what I call the short swap on a break out where you have the long position and are selling/lending to shorts. Thus each time this dips they have enough cash to buy up and squeeze shorts, mainly those shorting the bottom of the chart, who in turn cover at a higher price fuelling the move back up as other longs join in and it breaks upward. This pump move started under $6 to be conservative so you can see the avg price for these early longs is far under the stock price.

So how do you protect yourself against this type of move and still short this manipulated ticker? All that goes up must come back down theory is strong on @Stocktwits. You first off don't short where support is short way above at resistance, cover into support and re-short under support once it cracks with a stop breaking back above support. This is what I have been doing as a daytrade it works very well with very high success. If you remember 1st time I broke that rule was on $KBIO https://twitter.com/Osirustwits/status/667065707503337472

 also a crowded short. Second time was on my short of $IO Ion Geophysical also a manipulated push took a $1400 or so loss on that before I shorted it back for profit down. I was not taking a strike 3 on breaking my rules.

I bought option September 17th 2016 $16 and $17 calls 10 and 20. Each call is a lot of 100  so using these calls is how i am basing my risk. The price goes up in my short I avg up and cover down into a drop to get the lower shares off and my avg up. Worst case my short moves against me by $3 based on my avg now I call my options and get out for $17 plus fees. This is called getting protection those calls were $1.25, $1.70 and $1.85-2.00 when the price jumped but the options didn't move I shorted the pop covering into the drop. I was underwater on my short so I had to get my head back in profit or closer to the surface and i covered as I was over my account comfort. Some see that as scraping I see that as repositioning due to a squeeze without panicing. I think the algos on the options are smarter and faster than I am and yes I know stocks and options don't move in unison. All profit from my shorts on the day goes to buying protection and if this moves high enough I will swing puts from that profit too.

When I said this trade was based on fundamentals now I was serious about how much I put into a fundamental short technical shorts are never with this much effort, size or planning. this doesn't even include the DD on the company nor have I or will I touch upon that at all in this post. Once you have added that yourself see if you agree it is a no brainer short but where and when do you enter? That is the key.

I just hope anyone who is short has done the proper homework and has done a due diligence of more than just it is up on nonsense, as yes we all know this but the market cares not for what we think. Algos have no emotions and no morals neither do insiders who dump into a man made rally.

None of this is an indication to buy sell or anything else it was just how I am trading my money with my risk and reward. trade safe.

My broker and the platform can be seen here https://twitter.com/Osirustwits/status/738064508392902656

The joke that $LTRX called an earnings call is catalyst for a short tomorrow

The joke that $LTRX called an earnings call is catalyst for a short tomorrowbyosirustwits

So in short we made less money this year than last but got a $2 million Equity investment….so they covered debt and got shares?

Overall demand for their products have declined (might be because the Soc is only 256kb SRAM and just 512kb for flash competitor 10/100Base-T Ethernet Up to 640 KB SRAM for data, 1 MB flash memory for program storage and 2 MB serial flash for mass storage Up to 32 GPIO lines and 6 serial ports so already seeing this lag behind) which is a reduction of 5% but that is nearly a million dollars in cash flow comparison to prior year. This doesn’t add up.

Focus isn’t even on 2016 hence the weakest guidance I have heard/read in a long time and basically said this year is a wash but hold on for next year we only have 6million in cash but at the rate this will be 2.5

Non-GAAP net income was $121,000 or $0.01 per share for the fourth quarter of fiscal 2016 compared with a non-GAAP net loss of $575,000 or $0.04 per share for the fourth quarter of fiscal 2015 and non-GAAP net income of $189,000 or $0.01 per share for the third quarter of fiscal 2016.

Now turning to the full fiscal year, net revenue for the fiscal year ended June 30, 2016 was $40.6 million compared with $42.9 million for the fiscal year ended June 30, 2015. The 5% decline in total net revenue was primarily due to an 11% decline in legacy product sales, which was partially offset by 27% growth in new product sales.Gross profit as a percentage of net revenue for the fiscal year ended June 30, 2016 was 47.7% compared with 47.3% for fiscal year ended June 30, 2015. Looking forward to fiscal 2017, we expect gross margins to remain fairly stable.

Now turning to the balance sheet, cash and cash equivalents were $6 million as of June 30, 2016 compared with $5 million as of June 30, 2015. The increase in cash was primarily related to a $2 million equity investment from Hale Capital Partners in June and a $2.9 million reduction in net inventory. Sequentially net inventory decreased by $691,000 from the prior fiscal quarter. Working capital was $9.1 million as of June 30, 2016 compared with $7.9 million as of June 30, 2015. As of June 30, 2016 we had no borrowings on our line of credit.

Now looking forward, to-date most of the cost related to the launch of our New India Software Lab and the addition of sales and marketing resources has been self-funded by making tough choices and reallocating resources. As we continue to execute on our key strategic objectives during fiscal 2017, we expect to see some increase in operating expenses in support of these activities.

During the quarter, the new excitement and focus in our sales team translated into improved sequential results from all regions. We continue to invest in our sales force initiatives and we’ve recruited a number of new talented people to support our worldwide business. While it will take time for new sales resources to have an impact on results, I believe that we are off to a good start.

On the marketing front, we launched several new outbound campaigns that have already helped to contribute to increase demand for our SLC 8000 product line. Combined with our sales efforts, SLC 8000 revenues grew more than 200% over the fourth quarter of fiscal 2015, and we're up approximately 60% from the first half of fiscal year 2016.

Simply put we are in the business of delivering secure data access and management solutions for IoT and IT asset. Whether it is an electronics embedded IoT gateway that helps to securely connect a wireless cash register to the store for a sidewalk sale or an IoT device gateway that used to manage and access a water irrigation system in the city park or an IT management appliance that helps to bid the IT admin make sure that its network is operating smoothly 24/7 from anywhere

We fully anticipate we would likely encounter setbacks along the way but we are aligned on our plan for fiscal year 2017and have the conviction to invest in our strategy even at the times we have to trade up short term gains.

The journey is just beginning for us to build the new IoT data access and management solutions that will contribute to our long-term growth strategy. We believe that we have identified some interesting opportunities where we can provide new offerings that leverage our IoT know how and existing routes to market, whiles at the same time solve the bigger piece of the IoT problem. We have studied the market and believe we can offer a unique set of solutions with the different approach than others are using in the marketplace today. 

READ it yourself http://seekingalpha.com/article/4001678-lantronixs-ltrx-ceo-jeff-benck-q4-2016-results-earnings-call-transcript?part=single

IOT was the rage…2 years ago everyone is partnered or announcing partnerships and just now you are moving your focus to this but not till 2017.

After the call this began to sell off so to me it is not an earnings winner but tomorrow tells the story because it is upto the market to determine winners and losers.

So based on this crappiest of ER calls I am giving my first SHORT of the summer I know some who read this will short his company back down the manipulated mountain it climbed and I will be with you. Do you own DD and know that I have haters who will try to prevent this trade from being successful.

So to them I say watch the video below

PART 1 - OF WHAT HAPPENS WHEN WE TAKE SKILLED SHORTS INTO PARABOLICS. #STOCKS #PENNYSTOCKS #STOCKMARKET #SHORTSELL pic.twitter.com/DHonxHxZ3k

— SAVAGE TRADES (@SAVAGE_TRADES) May 17, 2016

VIA of @SAVAGE_TRADES