Wednesday, April 15, 2009

Lenny Dykstra Gets Lucky With Intel

Lenny Dykstra Mock Ad Adam Warner at the Daily Options Report made the following observation about Lenny Dykstra’s massive Intel (INTC) options trade recommendation:

As some of you may know, Lenny's 10 lot of INTC Deeps mushroomed into an 880 lot of ATM calls. Specifically the April 15 calls.

Lenny owns them at an average price of $1.40, and has apparently kept lowering the offer down to $1.50.

Well, a funny thing happened. INTC rallied a bit, and with earnings on, the calls carried a modest premium over the stock. And as luck would have it, topped at exactly $1.50. In fact 92 traded.

So it looks like Lenny got awfully lucky with his Intel recommendation.

I just wonder about all the subscribers who put in GTC sell orders at $1.50. Given how many times Lenny recommending averaging down (going from 10 contracts worth about $6K to gambling $132K on 880 contracts is no laughing matter), a great deal of the open interest in the Intel $15 Call (ticker: NQDC) were probably his subscribers.

And if just 92 contracts traded at $1.50, that means basically all of Lenny fans were holding the bag as the stock got creamed. Had he actually owned 880 calls, his own position may never have been filled.

Well Lenny, sometimes when you win, you really lose. And sometimes when you lose, you really win. And sometimes when you win or lose, you actually tie. And sometimes when you tie, you actually win or lose. And sometimes when you win, and the people who listen to you don’t have over a hundred grand to average down on a ridiculously super-high risk options trade, THEY LOSE. 

But what do you care?

Want to read more about Lenny Dykstra and his deep-in-the-money call option strategy? Just click these links:

Should We Be Listening to Lenny Dykstra

Inside Lenny Dykstra’s 99-1 Record

Lenny Dykstra Was in Bed With AIG