I’ve now finally stepped up and done my first purchase of some…

Trading is as much art as science.  And while the “science” behind my bullishness on Riverbed hasn’t changed while it’s been crushed from the $40s to $20, I’ve been saying things like this about my approach to Riverbed:

Q: What is your strategy, if any, moving forward with RVBD?
A: I’d gotten rather lucky with the Riverbed trade as we’d sold most of our common and calls when it was near its highs and I’d explained this strategy in detail as I was doing it. The calls I own are now far out of the money but they still have a few months on them, so I’m holding them steady for now. I do plan on buying my full Riverbed common and call positions back in coming days or weeks but am in no rush. (from: Transcript from chat)


Q: Last week you said we were going to scale into some of our RVBD calls. I am waiting for an update on when we are going to buy some. Today the stock tanked again by 9% in the morning and looks like its recovering a bit. Is this the right time to buy some long term calls? On the other hand, while looking at the charts for this stock for 2 years, the stock has been up from $15 in July 2010 to $30 now even after taking a hit after earnings. Looks like a topping pattern to me.
A: Regarding RVBD — today’s big hit is because of Juniper’s ugly guidance and commentary. I’m looking three to four years out and I think RVBD will be much higher. Not a rush right now though, recall that I’d sold my common down and kept some of the higher priced calls and that’s helped stop me out at higher levels than these. (from: Questions and Answers from Chat)

Riverbed’s been dripping steadily lower as I’ve been patiently waiting to add to it once again since we had sold most of our calls when it was indeed over $40.  (see: Let’s talk about some important trading strategies that I’m employing right now, for example).

I’ve now finally stepped up and done my first purchase of some Riverbed since then.  I’m buying calls dated out to December and January around the $25 strike price.   First tranche of what I expect will be about three or four tranches of Riverbed repurchasing.