RIMM On The Way

• Posted by Adam Warner
• on December 16th, 2009

Lots of buzz about RIMM earnings this go around, at least judging by the anecdotal tell of me getting a few emails to give it a look,

So let’s dig in.

RIMM makes something you may have heard of called a “smartphone” . I predict in the future, only the 4 richest kings in the world will be able to afford one. I personally use an Iphone, mainly because I won one a few years ago and so help me, I’m so used to the interface I literally can’t type on a blackberry keypad. So don’t hold your breath for that covetted Daily Options Report Smartphone Endorsement.

RIMM generally prices in about an 8-10% move. It’s a day early to know for sure, but it looks like the lower end of the range right now if you watch the Decs. But here’s the oddity, Jan. options could really get clocked here. 10 Day HV has crept up from 20 to 40 this month, but that’s probably high end. Jan. options trade high 50′s volatility now, but could easily settle back in the mid to low 40′s and that’s a rather large move given they have a full cycle to expiration.

So throw it all together and I’d say the board anticipates a 10% move right now. RIMM tends towards the feast or famine. We’ve seen it do nothing and we’ve seen it get rocked, like last cycle’s pounding. In fact that pounding is exactly why the Jan’s are holding strong here.

Probably going to wait another day, but I’m inclined to fade the fear of a rerun of last cycle and sell some gamma here.

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