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No. of Recommendations: 1
This is an activity that I engaged in over the last 2 years with CGA and YONG. My net results are fortunatly close to a breakeven. I think that these stocks are cheap primarily because of limited institutional ownership owing to their sub $0.5B revenue. As such they will always be vulnerable to short attacks other risks notwithstanding. I found that instead of engaging in options on these stocks it is better to engage in outright purchase whenever an opportunity presents itself via a good quarter when the share price does not increase or after a short attack. After any short attack any options written prior to that are jeopardized. It usually take a few months to an year for the stock to recover but by then the options have expired. It appears to me that existence of LEAPs in these stocks could stabilize their share prices. But until then I find it more profitably to keep buying these stocks in small quantities opportunistically.

Anurag
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