Research in Motion (RIMM, $97.84, down $5.60) fell back below $100 on Monday ahead of its scheduled earnings report on Thursday. The stock has been making $10 swings almost on a daily basis which leads me to believe the stock will make a substantial move by the end of the week.

There are some analysts who expect RIMM to post solid quarterly results, with revenues of $2.6 billion and earnings-per-share of $0.87. Although early October’s availability of the company’s 3G Bold and Kickstart have acted as a near-term catalyst, there’s a report out that says RIMM’s September sell-through numbers are looking “slightly disappointing” ahead of the new product launches. This was on top of a “flat” August.

There are too many variables to consider a trade for RIMM, especially with earnings coming out. To me, it is looking as though RIMM’s new products are going to have a bigger impact on the company’s next quarter, not this one.

Worldwide smartphone sales grew nearly 16% in Q2 from a year earlier and smartphones control about 11% of the mobile device market. That’s good news for RIMM because it shows there is still plenty of market share to capture. However, with so many competitors coming into the fray, RIMM will be fighting for that market share with the likes of Apple (AAPL, $131.05, down $9.86) and even Google (GOOG, $430.14, down $19.01).

The stock hit a low of $88 on September 18 which tested multi-year support. I profiled a RIMM strangle option trade earlier this month that netted us a 35%-40% profit. I would almost go out on a limb and recommend the same trade but it’s just too risky. The recent low has me leaning towards RIMM testing those lows again but a good earnings report may help the shares from sinking.

Rick Rouse
Rick@OptionsMentoring.com

Google (GOOG, $418.66, down $1.29) succumbed to the market’s downfall despite some good news yesterday. We learned that Google’s new Chrome web browser is already making waves and a deal with NBC Universal had the stock moving higher right out of the gate but by the end of the day, the stock finished in the red.

I said if we could get into the September 460 calls (GOPIL, $1.70, down $0.15) at $2.00-$2.25 Tuesday morning, “we may be able to ride them higher for the rest of the week”. Well, how about riding them for about a half an hour? Google opened at $423 and jumped another $9 to $432 within the first 20 minutes of trading. The calls opened at $2.00 and hit a high of $3.30 which gave us a quick 50% profit.

Remember, we are in a volatile market which means you can get whipsawed in-and-out of trades. Instead of looking for the homeruns, take what the market is giving you. The homeruns will also come but never pass up 50% profits in a day or in this case 30 minutes. At the very least, sell half the position. That has been working extremely well for us lately.

I still think Google will rally a little by the end of the week, maybe even this morning. The good news is that the shares were up $3.34 in after-hours trading. Hopefully Google can get back to the $430 level so that these calls can return another 50% or more.

Rick Rouse
Rick@OptionsMentoring.com

Talk about fireworks. Google (GOOG, $465.25, up $1.96) came out like a rocket this morning after the debut of its Internet Chrome browser only to fizzle at the end. The stock was up 19 and change to $482 within the first 30 minutes of trading and briefly traded below Friday’s closing price of $463.29 before finishing the session slightly higher.

The four-year development of Chrome finally came to fruition today as the company takes direct aim at Microsoft’s (MSFT, $27.10, down $0.19) Internet Explorer. Folks, it doesn’t get any bigger than this. Simply put, the risk and rewards are that great for Google.

Microsoft currently controls a little over 70% of the Internet browser market. Mozilla’s Firefox and Apple’s (AAPL, $166.19, down $3.34) Safari fight for the rest of the market share which are the only real two competitors Microsoft has. Until now.

Of course Google claims Chrome is simplier and faster and is not only trying to get you to use it but to sign up for new services. The web based service market is expected to grow big-time by 2011 and Google wants in. And here’s a little gas for the fire. Eric Schmidt, who is Google’s CEO, once worked for Novell (NOVL, $6.40, down $0.03) and Sun Microsystems (JAVA, $9.00, unchanged). He was in charge of Java, Sun’s platform-independent programming technology, which never had much success taking on Microsoft. So the two companies he has worked for have been thwarted by Microsoft in the past. You get the picture (sly grin).

I’m not sure how successful Chrome will be and only time will tell if this will be a major victory for Google or another side distraction. The euphoria sure wore off as the day progressed. Once again, this is why “most” of the time you shouldn’t buy options at the open. (I say “most” of the time because I did profile some McDonald’s call options this morning). The Google September 500 calls (GOPIO, $3.70, up $0.40) opened at $6.00 this morning and traded as high as $7.00 before closing substanially lower. Imagine buying into the hype at $7.00 only to lose 50% of your cash by the end of the trading day.

Meanwhile, if you had bought the Google September 450 puts (GOPUJ, $8.50, down $0.37) shortly after the market opened, you could have bought these puts at $4.00 or $5.00 and doubled your money by the end of the day. Oops. I just told you how Wall Street works again. Shame on me. But seriously, both of these trades were risky and this is how a lot of individual investors lose their money and get frustrated with options.

Google has basically been below $500 a share since it disappointed Wall Street with its earnings back in July. The stock had a nice run in mid-August to $510 but is still trading below all of it major moving averages (i.e, 20, 50, 100 and 200-day). It shows the market is being risk-adverse when it comes to Google. There will be a time when the stars are aligned just right for us to go long or short Google but right now is not that time.

Rick Rouse
Rick@OptionsMentoring.com

Yahoo (YHOO, $19.38, down $0.05) has dipped below $20 again and it may be time to start nibbling on a small position. The stock has taken a back seat to the financial sector right now and it may be a good time to take advantage of the drop below $20.

We all know when it comes to online search, Google (GOOG, $4865.99, down $4.51) is king. The numbers were just released for July and it showed that Google is increasing its share of the U.S. online search market. Google now commands 60% of the market, up 16%, as rivals Yahoo and Microsoft (MSFT, $27.39, up $0.07) each saw their respective shares decrease. Yahoo’s search share drop 11% from a year earlier to 17%, and Microsoft saw its share drop 10% to 12%.

Microsoft has seen this coming as it feverishly tries to play catch-up. The latest numbers show just how important it is for both companies to do something now in order to gain ground, or in this case reclaim lost ground, on Google in the lucrative online search advertising market. Yahoo can’t do it alone and there are other companies besides Microsoft who may jump back into the frey to acquire Yahoo.

Either way, Yahoo should get some interest from the market at current levels. Timing is everything and we are going to “layer” this trade in case we need more time for it to develop. The Yahoo October 20 calls (YHQJD, $1.50, unchanged) look attractive here for a half position and the January 22.50 calls (YHQAX, $1.45, unchanged) for the other half. I think Yahoo will make a move back above $20 once interest starts to pick back up in the stock.

Rick Rouse
Rick@OptionsMentoring.com

Chipotle Mexican Grill (CMG, $69.01, down $14.79) has dipped below $70 again after opening the trading session at $74.29. The stock traded to a high of $75.50 but the bears have been firmly in control since the opening bell. I mentioned the after-hours trading was a good indication that the stock would probably open around $75 which we got.

I went out on a limb with the August 70 puts (CMGTN, $4.70, up $3.30) because trading options around an earnings announcement is the riskiest way to lose all of the cash you put up for a trade. However, sometimes you get such a good feel for a company, how it trades, and how it reacts to earnings announcements that it just doesn’t matter.

Chipotle is a stock that I have followed since it become a public company. Google (GOOG, $488.16, down $1.06) is another company I have followed since its IPO. The point is I rode Chipotle on the way up when Wall Street was drooling over their earnings announcements and profiled many call options when the stock made its run to $155. Now, I’m simply playing Chipotle on the way down.

The puts were profiled at $1.60 in the blog so we basically have a 200% gain on our hands. The puts have hit a high of $5.80 for the day when the stock hit a low of $67.40. That is probably going to be the peak for the day but it’s hard to say with the Dow struggling going into the final two hours of trading. The Dow is down 212 points to 11,420 and appears to be headed even lower. Set stops at $4.25 or you can sell half today and let the rest ride on Friday. This was ony a one or two-day trade so the position should be closed before the weekend, regardless.

Rick Rouse
Rick@OptionsMentoring.com

Google (GOOG, $535.60, up $19.51) reports 2Q earnings today after the market closes and it will be interesting once again to see where Google will trade at in after-hours and where it will open on Friday. We can expect Google to comment on a lot of things and its different types of businesses but there is one segment of their business that I’m really anxious to hear about.

The acquisition of DoubleClick and YouTube will be closely followed. Google acquired DoubleClick for $3.2 billion in March so this will be the first quarter that DoubleClick will figure into the equation. However it won’t be adding to the bottom line this quarter. Early estimates say that DoubleClick will cost Google $35 million as DoubleClick only contributed $65 million in revenue while incurring $100 million in expenses. These intergrations take time so the market may overlook this hiccup. YouTube is doing okay but is well short of getting the $300 million in video advertising this year that Google had planned for.

The big update I’m waiting to hear more on is the smart-phone market. Smart-phones get search, maps, mail, and YouTube on their device which means more revenue from ads delivered on those mobile handsets. Android is Google’s baby and will be the software that allows users to access even more of Google’s products. Google also plans on entering the handset market with a phone of its own and there is a rumor that Google is experiencing delays to its supposed fourth quarter launch. That could hurt the stock but Wall Street may choose to focus on the billions of dollars that Google expects to earn from the mobile market.

Here’s where it gets juicy. Back in April when Google last reported earnings the stock zoomed $86 the next day. The nearly 20% gain took the stock from $450 to $536. So what happens if Google can get another 20% gain? This would put the stock at $640.

Believe it or not, the July 600 calls (GOOGT, $1.85, up $0.65) were heavily traded. These calls expire on Friday so it would certainly be an all-or-nothing trade. If Google moves 10% then these calls expire worthless because it puts the stock at $588. If Google moves 15%, then it puts the stock at $615 and these calls would be worth at least $15. In other words, a $200 investment would be worth $1,500 if it plays out that way.

The August 600 calls (GOOHT, $8.00, up $3.00) were up 60% yesterday and had some pretty decent volume. This would clearly be the safer play but Google has shown in the past that we may not have seen the best of the company quite yet.

There is serious risk to the downside if Google fails to impress Wall Street, ones I’ve outlined, but ones that might also be overlooked. If Wells Fargo can jump 33% on its earnings why not Google?

Rick Rouse
Rick@OptionsMentoring.com

Friday the 13th has been lucky for some, unlucky for others so far. Microsoft (MSFT, $29.32, up $1.08) and Google (GOOG, $5754.75, up $21.80) are trading higher while Yahoo (YHOO, $22.29, down $1.23) continues to get pounded. Microsoft and Yahoo failed at yet another attempt to get together forcing Yahoo to strike a deal with Google to sell search ads on its site.

The price targets and upgrades and downgrades on Yahoo and Google are in full force today but I’m not even going to mention them. I’ve mentioned that Google would ultimately be the big winner out of all of this and that appears to be the case. Microsoft’s bid reportedly was for $35 a share or $50 billion and it’s clear Yahoo just doesn’t want to merge with Microsoft.

The deal between Google and Yahoo was a big blow to Microsoft but it has once again created some interesting option plays. Yahoo fell 10% yesterday and the market is questioning the deal with Google. Yahoo is still trading above $19 which is where the stock was at before Microsoft made its original $45 billion offer, but far below the $33, now $35, a share Microsoft offered before finally leaving the table.

The deal Yahoo made with Google also leaves Carl Icahn in a pinch. The “corporate raider” had big plans to get Yahoo and Microsoft together but is now left with few apparent “options”. Remember, he owns 50 million shares of Yahoo at an average cost of about $25 a share. His losses are growing and he now stands to lose money if he can’t come up with another plan and decides to cut his losses.

I’m not sure where Yahoo goes from here but there seems to be some options traders buying the July 25 calls (YHQGE, $0.59, down $0.38) before the weekend in hopes of a quick trade and exit for next week. Yahoo had originally traded higher on the Google news last night and some are trying to play a possible small rebound in Yahoo. The Google July 610 calls (GOOGB, $12.90, up $3.80) are also getting some players.

Rick Rouse
Rick@OptionsMentoring.com

After flirting with $600 earlier this month, Google (GOOG, $581.00, up $4.70) seems destined to fall short of that mark before the May options expire on Friday. Although a $20 move either way is not out of the norm for Google, option traders seem to be locking in on two prices.

Today’s close at $580 (roughly) kept the May 580 strike prices busy, naturally, but it was the action in the May 590 calls (GOOER, $1.05, down $0.35) and the May 570 puts (GOPQQ, $0.75, down $2.05) that option traders placed their chips on.

With the May options expiring on Friday, there is a lot of bets on Google making a $10-$12 swing. If Google is at $592 then the may 590 calls would represent a double because they would be $2 in-the-money. If Google is at $568-$569 then the May 570 puts would be $1-$2 in-the-money.

Then again, if Google stays flat on Friday then both parties are wrong. Either way, it is going to be an interesting showdown between the bulls and bears over where Google settles by tomorrow’s closing bell.

Rick Rouse
Rick@OptionsMentoring.com

It’s official, Microsoft (MSFT, $29.24, down $0.16) has withdrawn it for Yahoo ($28.67, up $1.86). After going as high as $33 a share, Yahoo held out for $37 which Microsoft simply felt was too high. Microsoft’s decision to walk away from the table came Saturday after last-minute efforts to negotiate a mutually acceptable deal. I sensed Yahoo was going to be stubborn and that was questioned after Microsoft raised its bid late Friday. However, when it was all said and done Yahoo stuck to its guns as did Microsoft.

Here is what Microsoft’s CEO, Steve Ballmer had to say, “After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.”

Yahoo’s Jerry Yang’s response, “With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history.”

It was a surprise ending and I compared the drama to a script out of Hollywood. And we all know how Hollywood works. This story is bound to have another sequel (Microsoft tried to buy Yahoo once before) so we could see a “Microsoft/ Yahoo 3″.

As for now, there will be interesting subplots. What happens to Yahoo’s stock price? Is something in the wings with Google? If Yahoo’s stock drops back into the teens will Microsoft start buying shares in the open market? Does Microsoft look elsewhere for a partner…ValueClick (VCLK, $19.93, down $0.19)?

One thing is for certain come Monday. All three stocks will be very active.

Rick Rouse
Rick@OptionsMentoring.com

Google (GOOG, $578.47, up $20.00) continues its steady climb after its earnings announcement on the 18th. The stock is up another 3+% today after the company’s CEO had some positive things to say. Here is all you need to know. In an interview, he said, “In our case, we focus on quality, and we have a very simple model. If we show fewer ads that are more targeted, those ads are worth more. So we’re in this strange situation where we show a smaller number of ads and we make more money because we show better ads. And that’s the secret of Google”. I love that last sentence.

I have been mentioning over the last few weeks how Google could continue to climb based on Microsoft’s (MSFT, $29.15, up $0.51) and Yahoo’s (YHOO, $27.15, down $0.21) ugly battle. The stock is making a big push at $600 and that would mean a $150 move since their earnings announcement. Wow!

I had also mentioned that traders were active in the May 500 calls (GOPEO, $81.00, up $20.10) before Google announced earnings. They were selling for $7 at the time. It’s hard to believe a 10 contract option trade that would have cost you $7,000 would now be worth $81,000 in two weeks. Now that’s making money.

Google is well aware of just how much they stand to benefit from the Microsoft/ Yahoo stand-off. When a fire gets low, you throw more wood on it. If it gets too low, it’s likely to go out or smolder. It looks like Yahoo and Microsoft are smoldering and its no wonder that Google stoked the fire today.

Rick Rouse
Rick@OptionsMentoring.com