Finding Mispriced Call Options
Posted: Jun 21, 2024
- Looking for stocks with high short interest and with disagreement in market value can lead to cheap call options - Formula used: Short interest * Price >= Market Cap * 0.05 to screen for high short interest compared to market cap - Another formula used: Cash and Short Term Investments + Total Receivables >= Payables and Accrued Expenses * 1.2 to ensure financial soundness - High short interest and low PE can lead to potential opportunities for cheap call options - Tegna (TGNA) and General Motors (GM) mentioned as examples of companies with high short interest and share buybacks fighting short sellers - Focus is on finding companies with sound financial strength, cheap calls, and potential for increase in value due to share buybacks - Seeking suggestions for easier ways to find cheap calls, including consideration of long-term call options and duration of share buybacks impact on stock value
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