As I look at the after-hours price quote of Pandora being down 18% from the close I can't help but nudge myself to stick to common sense when fear is the issue...Since yesterday I was thinking of playing Pandora to the downside, mainly because there have been a few months now that I haven't heard any advertising between songs which used to occur every 30 minutes or so on the Pandora radio; and then there is the whole case where musicians are taking Pandora to court. So in doing simple math we have a company that for the last quarter of the year has not received any income plus has had lawyer fees to weigh in on its budget. This was a screaming short, but I just didn't have the guts to get in on the game.
Before the market closed the Dec12 $10 Put was selling for $1.20, tomorrow morning at the open it will be worth at least $2.20, a 83.33% gain.
Lesson Learned.
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