The Scenario:

We all know that Apple has become the king of smart phones, which was recently proven when they reported a staggering sales number of over 74 million iPhones sold in one month, far outpacing any competitor.

Apple has just crushed the once mighty Blackberry, a company that has fallen on hard times. Blackberry is no longer considered innovative, and they are finding it nearly impossible to keep pace with Apple (or anyone else for that matter). Every now and then, a rumor pops up that someone is interested in buying Blackberry, and though these rumors have all proven to be false, we see some nice spikes in Blackberry’s price – and that’s when we trade the name.

Why We Got On Board with Blackberry:

The most recent rumor emerged towards the end of the trading day when a Reuters story reported that Samsung made an offer on Blackberry. Now, it is well known that the patents owned by Research in Motion/Blackberry are valuable, probably more than the shares. It was entirely plausible that this rumor could be the real deal.

As you’ll see in the video, there was a major spike in price on the Samsung rumor – a nice surge occurred on some big volume. We also saw a big accumulation of options, both call buying and put selling, which fueled the price rise. This all happened within the last twenty minutes of the trading day.  By the closing bell, the stock had risen about 30% or so from the lows of the day before falling sharply after hours when the rumors were squashed.

Our Blackberry Trade Results:

Despite the extremely quick action on this stock, I provided guidance to every member who was in the Explosive Options Chat Room, and we all had plenty of time to easily enter and exit trades – and enjoy a stellar gain.

My trade was for 25 cents one strike out of the money, and I was selling half at 50 cents (a nice double) and the rest at $1 (a 300% gain).  Dave, one of our Chat Room members, got in around the 20-25 cent range and closed out most of his trades for about 90 cents.  Katie, another Chat Room member, came in late but still banked a super doubler on her trade.