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July 16, 2018 | Two Hottest FAANG Stocks Get Their Comeuppance

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

The two hottest FAANG stocks got pasted on Monday, shortening the odds that the broad stock averages may have seen their highs for the year. AMZN fell $28 after leaping to within $1.34 of a 1843.29 target drum-rolled here earlier; and NFLX, an overrated bag of wind about which Rick’s Picks hasn’t had a good thing to say in more than five years, was down $53, or 12%, to $344 in after-hours trading. Analysts acted surprised by news that the latter company added a million fewer subscribers than had been expected in the second quarter, raising the question of just who was doing the expecting. Egregiously overpaid analysts, no doubt, and one can only wonder why these guys are so prone to surprises. No Rick’s Picks subscribers reported using the AMZN target to get short, so I did not establish a tracking position in the stock. For the record, NFLX puts that could have been bought for as little as 0.60 on Monday would be trading for around 18.00 — a thirtyfold increase — if the options exchanges were open right now. Out-of-the-money puts in AMZN were less rambunctious: With the stock down about 1.5% on news released during market hours, 1750-strike puts expiring on Friday nearly quadrupled in price off a low of 0.88.

 

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July 16th, 2018

Posted In: Rick's Picks

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