HIMX has been the subject of several large options trades over the past few months, none of which have panned out thus far so I wouldn’t read too much into this one. Options are a zero-sum game and are often used in tandem with equity trades as insurance so it is impossible to know what the motivation is for this particular contract. Presumably, the sellers of that put contract are expecting it to expire worthless while the buyers aren’t going to make any money off of it unless the share price for HIMX drops below $4.50 within the next two weeks. HIMX is up 50% over the past month and gained another 2% today so it’s hard to say why someone might think those put options are likely to pay off with so little time remaining.

I have considered AMD, and recommended it a couple of years ago in one of our other services, Breakthrough Tech Profits (nee Smart Tech Investor). Since then it has shot up in value, which is great for investors that bought it then but at this point it appears overvalued to me, and only makes sense if it is acquired later this year. If not, then its share price could fall back to is intermediate-term support level near $10.

Hi Jay. BTP is not intended as a trading service, even though we have booked some very nice short-term gains during the past year so I don’t know if it is exactly what you are looking for. SW is intended as a trading service, but it does not recommend specific option contracts (however, several SW subs share their specific options strategies on the website so you can look at those if you aren’t sure how to execute our advice). For those reasons, I suggest you also consider Velocity Trader, which is both a trading service and is built entirely around options: https://www.investingdaily.com/velocity-trader/. Thank you.

Jay, also check out Options for Income.

Options for Income is a conservative put credit spreads service and Velocity Trader is a aggressive call debit spread service. I’m a member of both and would recommend either one.

Derek

Hi Jay, I agree with Derek, OFI and VT are very good.

It appears somebody is accumulating a large position in HIMX, most likely a mutual fund or another type of institutional investor. If so, then once that position is filled the stock will most likely flatten out until the next quarterly earnings report comes out in May. HIMX is currently above my buy limit of $7.50, so at this point I only recommend buying on dips below that level. But until hits my target price I will continue to hold it.

Yes, I will continue to follow ARGS even though it will no longer be held in the BTP portfolio. The company still possesses some intellectual property that it could sell, and it’s still possible that the ADAPT trial could be resumed if the cause of the failure can be rectified.

The big date for HIMX will be during the week of May 10th when it releases its next quarterly earnings report and forward guidance. Until then I don’t see why its share price might take a big drop, but of course that’s always possible with a small-cap tech stock. One way to protect most of your gain is to place a stop order a little below its current price, which would only be executed if HIMX trades at or below that price.

HIMX had a big run up over the past couple of months, so a pullback is not surprising. I have seen no new information over the past couple of days to explain this week’s price behavior (other than this generally positive article from Barron’s: http://finance.yahoo.com/m/087a04f1-3e90-3137-b039-3d581fc589f7/himax%3A-3d-sensing-supplier-to.html). HIMX is a particularly volatile stock, so don’t read too much into its short term ups and downs.

Dear Jim: HIMX now at US$ 8.29!! What is your opinion now on HIMX and what do you recommend to do with it?

I’m not Jim but I can tell you that it’s now at 7.66 and that no one can know future share prices, or the reasons they move the way they do on most days. Himax is a longer-term bet and if something happens important enough to change our outlook on the stock we’ll be sure to let you know, promise. I’ll also volunteer that while looking at share prices daily is an occupational hazard I can’t avoid, it’s a good idea for almost everyone to not look for as long as possible. Frequent quotes will not improve your decision making; in fact they’ll hinder it. Please check out this excellent book for more: https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555/ref=reader_auth_dp

Yes, the same way it would have been correct before any decline, I suppose