September 17, 2010: Easy A, The Town, Devil

I'm doing an abbreviated post today, and a day late, because I am dealing with some family stuff that requires my attention.

Easy A: Up recently, but down today. Great reviews, at 82% on RT. Strike price is H$15, and the call is doing well, while the put is below a buck.
Stock: Long
Call: Long
Put: Short

The Town: Same as Easy A: Up recently, down today. Even better reviews, at 92%. You go, Ben Affleck! Same strike price, although there is more of a disconnect between the options and the stock.
Stock: Long
Call: Long
Put: Short

Devil: Down quite a bit recently, not a great sign. From M. Night Shyamalan, although he didn't direct it, and his brand isn't what it once was. Same strike price, but with opposite movement.
Stock: Short
Call: Short
Put: Long

Alpha and Omega is dropping off a cliff. Same strike price again, although it's completely ludicrous. Looks utterly cliched.
Stock: Short
Call: Short
Put: Long

Update Sunday afternoon: Not a bad weekend, considering my abbreviated post. Ben Affleck did quite well, with The Town very nicely exceeding expectations, with $23.8 million, adjusting up almost H$20. Easy A did well, but not quite as well as expected, with $18 million, adjusting down about H$5. At least it beat the strike price. Devil and Alpha and Omega didn't, although the cartoon did slightly better than expected, and adjusted up a smidgen. That means that I got almost everything - 10 out of 12 - right.

August 13th, 2010: Scott Pilgrim Eats, Prays, and Loves the Expendables

We have three very different movies opening on this Friday the 13th.

First up is The Expendables (XPNDB), just about the purest example of an action movie we've seen in a while. Absolutely no pretense here: this is about tough guys, fists, knives, guns and explosions. Plus the occasional damsel in distress and snarky put-down. Stock has been extremely volatile, currently resting at H$85, up 50 cents for the day, but down from a high of H$112. No gently sloping bell curve here, the chart looks like an EKG. The strike price for the options is H$25, which predicts a stock price of about H$67. So that seems low. Call is at H$5 and climbing, put is below a buck. It's going out on 3,200 screens. Critics aren't very excited, with only 44% on rottentomatoes.com, but that's not a surprise. No Blockbuster Warrant, probably because there isn't much time until the BWs delist. It's old-fashioned, but I'm sure it will have a certain appeal. Needs H$31.5 to meet the stock price. I'm optimistic, but I am going to keep an eye on this tomorrow.

Stock: Long

Call: Long

Put: Short

Julia Roberts is back in a starring role in a movie that may or may not be a romantic comedy. It sure looks romantic, but I'm not sure it's a comedy. Eat Pray Love (ETPLV) is based on a book that neither I, nor, I suspect, many men have read. But I'm sure it's wonderful. I have no problems whatsoever with women's literature focusing on relationships, because relationships are very important. This stock has been climbing quite steadily. It's at H$62 today, but a bit, but not far from the high of H$66. Strike price is again H$25, which is just right. The call is just above H$2, while the put is closing in on H$3.50. Going out on 3,000 or so screens. Critics aren't very excited with it, just 42% giving their approval on RT. This movie is an interesting contrast with XPNDB: one features an ensemble cast, and is about as macho and testosterone driven as possible; one is about as woman-centric as possible, and stars just one woman. Not a coincidence that they are opening opposite each other. The one thing that confuses me is why a guy (Ryan Murphy) was chosen to direct this. I'm sure he's good, but this feels like it probably could have benefited from a woman's touch. Either way, I'm not betting against Julia Roberts, a huge bestseller, lots of gorgeous scenery, and some nice men being nice to a movie star. Critics are complaining that it's self-indulgent. I think that's the point.

Stock: Long

Call: Long

Put: Short

Aiming, of course, at a completely different crowd, is Scott Pilgrim vs. The World, based on a comic I've never heard of. Michael Cera, who is defying all kinds of conventional wisdom by maintaining his status as a movie star, is Scott Pilgrim. He falls in love with a girl, but then has to battle her seven evil ex-boyfriends. Great premise, that's for damn sure. It's ridiculously stylized, with great graphics and CGI. Stock (SPILG) is not doing that well, crashing the last couple of weeks, down to H$54, from a high of H$81. Sounds like the hype got the better of a few people. Strike price is H$25, which doesn't seem very realistic any more. It's going out on 2,800 screens, a marginally more conservative release than the other two, but actually somewhat optimistic, given that it has sort of an indie feel. Critics are very impressed, with a 76% rating on RT. I am betting against the market, because at the end of the day, one thing matters above all else when making these predictions: is it a good movie?

Stock: Long

Call: Long

Put: Short

Update Sunday night: I took a risk on Scott Pilgrim, partially because it was getting great reviews, partially because I like the idea, and partially just for the hell of it. Now that this game is back to being irrelevant, what with that whole overreaction by the MPAA and their friends in Congress, I wanted to take a position and stick with it just for the hell of it. So that's now out of my system. At least I hope. The Expendables did as the market predicted, coming in well above the strike price, at $35 million, adjusting up to H$94. Nicely done, Mr. Stallone. Julia Roberts came in just under the strike price, but almost exactly at the stock price, earning $23 million, and adjusting up a grand total of 32 cents. Nicely done, HSX traders. Scott Pilgrim did better than most arthouse flicks, but not as well as the other movies this weekend, bringing in a grand total of $10.5 million, and adjusting down by H$21, from H$49 to H$28. Still, I'll hold that long to delist. Also going long to delist on Julia, but shorting Sly and Co., because that looks like a flash in the pan.

July 23, 2010: Salt and Ramona

We have two movies with female protagonists this weekend, but very different demographics.

First up, a kid's movie. Ramona and Beezus is based on the popular books, which I remember when I was knee-high to a blockbuster. I don't think I ever read them, but I remember the name. This is presumably an attempt to start a franchise. Not looking good, tho: the stock (RMONA) is tanking, down to H$27 or so, down from a high of H$44. Quite a precipitous drop, too, in just the last few days. Strike price was set at H$15, which is just a bit too optimistic, so the call (RMONCA) is dropping through the floor, below 50 cents. The put, of course, is well above the IPO, at H$4. Won't be hard to call those. Full disclosure: the director, Liz Allen, graduated from USC, and I've met her a couple of times. So I'm a smidgen biased. Critics are mostly enthusiastic, with a 59% rating on RT. One more positive review, and it's certified fresh! It's going out on a good number of screens, about 2,700. It needs $10 million to make the strike price. That's a PSA of $3,600. It's a very narrowly targeted demographic, but it's also a somewhat underserved demographic. There are always a certain number of family movies, but not a lot just for little girls. The challenge will be getting little boys to see it as well. My guess is that the stock has bottomed out, and that there is more potential on the upside than the downside. There isn't a Blockbuster Warrant.
Stock: Long
Call: Short
Put: Long

Angelina Jolie is back, in the kind of role that she does very well: action adventure. Yeah, baby! Salt (ESALT) looks good to me, although I am a big Angelina fan. Stock has been drifting lower, to H$92 today, down $3 today, and down from a high of H$110. Strike price was set at H$4o, which is now slightly out of whack with the stock price, which predicts an opening of $34. Call (SALTCA) is, predictably, dropping, below IPO. Put is doing really well, up to $4. All the signs so far are pointing in roughly the same direction. Strike price for the Blockbuster Warrant (BWSALT) is at H$100, a very reasonable price. This has not been dropping, and is at H$10. So that sign indicates marginally better prospects than the other securities. Critics are not particularly impressed, but they're not hating it, either, with a 56% rating on RT. Normal people seem to like it, with an A- so far on Yahoo! I'm more optimisitc than the market, I think there is more potential on the upside than the downside. I'm going out on a limb and betting that it will make the strike price, although not by much. I'm aiming for the sweet spot, between the call and put, right around H$40.
Stock: Long
Call: Short
Put: Shot
BW: Long

Update Sunday night: I was slightly off on the stock for Ramona et al., but otherwise I nailed it. Ramona and her sister and friends came in at $8 million, slightly below my expectation, but otherwise a decent showing. The options were a no-brainer. Salt did hit the sweet spot between the call and the put, right at $36.5 million. I would not be surprised if it adjusted up. The stock also adjusted up slightly, to H$98, from H$93. The Blockbuster Warrant for Salt is down by a hair, to H$9, but that's largely meaningless. Mostly a good weekend.

July 16, 2010: Inception, Standing Ovation

There are two movies opening tomorrow. One of them is one of the most highly anticipated movies of the year, featuring an A-list star, and an A-list director. The other is a movie that few people have ever heard of, starring total unknowns.

Let's get the wannabe out of the way first. Standing Ovation (STNOV) is about some tween girls who just want to sing and dance, and live their dream. I can't begin to imagine that the plot is remotely interesting, but I'm also years away from being remotely in touch with the target demographic, so what do I know? The trailer seems well-done, which is a plus. I researched the team on IMDb, and it's not a particularly impressive group, but the director and producer have worked together before, always a plus. Stock is at H$4.47, which might be a tad optimistic. There isn't much to go on here. No options, not a surprise. There are only two reviews on RT, both negative. Again, not much to go on. It is going out on 623 screens, which counts as a wide release (600 is the threshold for a wide release). Strike price indicates an opening weekend of $1.65 million. It would need a per screen average of about $2,600 to hit that. It needs about 330 people per screen. Assuming 15 screenings per theater over the course of this weekend (5 per day for 3 days), that means they need at least 22 people per screening. That doesn't sound impossible. I'm sure there are a few hundred thousand screaming teenage girls who can convince their parents to take them to see this.

Stock: Long

Now we come to the blockbuster, Inception (INCPT). Boy does this look interesting. Starring Leonardo DiCaprio, and directed by Christopher Nolan, who should have a much bigger reputation than that M. Night guy. A movie based on an original idea! How cool is that?!? A movie with CGI that is actually justified by the plot. Wow. Stock has been rising pretty steadily, to a current H$191. That's down from a high of H$215, but that's not much of a drop. It's been incredibly volatile of late, down H$8 yesterday, up H$11 today. The price suggests an opening weekend of at least $70 million. Critics are very enthusiastic, with an 87% rating on RT. Strike price is H$75, with the call (INCPCA) not much above the IPO, at H$2.52 and sinking. The put (INCPPU) is doing quite well, almost at H$5. Strike price for the Blockbuster Warrant is H$200, and the warrant is well above IPO, at H$13. I am very optimistic about this movie, and I don't see much reason not to be. It may be a difficult concept to understand, but I think there are a fair number of people who will be thrilled to see a movie with an original plot. It's long, 2 1/2 hours, which might cut into the number of screenings, but it's also going out on 3,700+ screens.

Stock: Long

Call: Long

Put: Short

BW: Long

Update Friday morning: Inception is down H$5 this morning, but, considering how volatile it has been, that's not surprising. This seems to be one of those very polarizing movies - if you get it, you'll love it, but if you don't, you'll hate it. I'm guessing more people will get it, and they will really love it. Still going long. Standing Ovation is down H$0.39 today, which is about a 10% drop. That's not a great sign. The stock has had an interesting ride - it's spiked on several occasions, obviously on significant news - for example, actually getting a release date. But then it invariably drops. Not sure what that means, but it's interesting to note. But it still has minimal expectations. I'm not real confident, but still going long.

Update Sunday night: I don't know why I stayed long with a movie that obviously was drivel at best, but I did, and therefore got burned by Standing Ovation. I also was a little too optimistic about Inception - it cleared $60 million, below the strike price, and below the stock price. But the response has been so great that I don't mind losing money on it. Sorcerer's Apprentice basically bombed, coming in at only $17 million for the weekend, plus $7 million previous, so it adjusted down, from H$85 to H$54. A good weekend to be pessimistic, not a great weekend for me. But a good weekend for movies in general, apparently - a great movie made money, a bad movie bombed, and a piece of garbage was toasted. That works for me.

July 9, 2010: Despicable Predators

We only have two movies going wide this weekend, Despicable Me (DESME) and a reboot of Predators (PRED3), the action movie from the 80's.

Despicable Me looks like fun. Great title. Great trailer. Stock is at H$100, near the high of H$109. Strike price for the options is H$35, right on target. Call (DESMCA) is at H$4 and a half and rising, a good sign. Put (DESMPU) is below IPO and sinking, another good sign. It's going out on 3,400 screens, a good wide release. Critics are nicely positive, with an 87% rating on rottentomatoes.com. There isn't a CX derivative, since those are being cashed out. The strike price for the Blockbuster Warrant is H$120, with the price currently at H$11 and rising. All the signs are looking good, except for the fact that it's down today. But that could be just noise. I'm intrigued enough by the story to want to see it myself.
Stock: Long
Call: Long
Put: Short
BW: Long

Predator, OTOH, is not looking so good. Stock is at H$70. It's up H$2.50 as of this writing, but down from a high of H$114. That's not good. This also has a strike price of H$35, which is not terribly realistic. The call (PREDCA) is tanking, below H$1.50. The put (PREDPU), meanwhile, is soaring, aiming at H$5. Exactly the opposite of DESME. It's going out on 2,600 screens, not quite as many, but a decent release. Critics, somewhat surprisingly, are positive, with a 73% rating on RT. I know next to nothing about this, since I didn't see the original, and have no intention of ever doing so. But it sounds like the hype has been washed out of the stock price, and we are back in somewhat reasonable territory. Blockbuster Warrant strike price is H$100, and it's about H$2 and change. Which makes a fair amount of sense. So we're looking at about a $30 million opening weekend with this stock price. That would put it just ahead of The A-Team, and it sounds like this is a better movie.
Stock: Long
Call: Short
Put: Long
BW: Short

Update Friday morning: Despicable Me is doing well, up H$3 today, so I am maintaining those positions. However, Predators is down H$8.50, which prompts a rethink of holding the stock long. In a situation like this, I ask myself if there is any reason to bet against the market, and I can't think of one. Sequels and remakes and reboots are not doing well this summer. The biggest name in the cast is Adrien Brody. He's a fine actor, and he's probably fine in this movie, but he's not Arnold and I don't see him as a great lead in an action movie. Reversing position on the stock, shorting it.

Update Sunday afternoon: Despicable Me proved to be a solid performer, with $60 million this weekend, while Predators came in at $25 million. This is very similar to what happened with A-Team and Karate Kid: the family film outperformed expectations by a huge margin, while the action adventure movie came in either below expectations, or just barely above seriously diminished expectations.

I was wrong on the stock for PRED3, which technically adjusted up, but only by H$5. Otherwise I got all of the predictions right this weekend. Anyways, PRED3 is certainly a short to delist.

June 22, 2010: Knight and Day

Knight and Day (KNDAY) is opening today, a little unusually for a standard blockbuster, but we're going to go with it. I almost forgot about it, so I don't have a lot of time for analysis, but I don't think it needs or deserves much, easier.

I've been looking forward to this, because Tom Cruise seems to be having a good time, and he seems to be funny. That's kind of a nice change of pace, although he always seems to be having a good time, and he was very funny in Tropic of Thunder. Stock, however, has been tanking, down to H$82, from a high of H$136. The strike price is H$35, with the call at H$2. Yeah, that ain't gonna happen. The put is above H$5. There's some residual optimism in that call. The CX derivative also has some residual optimism, still above H$90. The Blockbuster Warrant IPOs tomorrow. Reviews on RT are middling at best, with 54% fresh, and the positive reviews lukewarm. I like Tom Cruise. He's one of the movie stars that I put in the "decent actor but amazing performer" category. I always feel like I am watching Tom Cruise - he doesn't disappear into the character. But he's usually at least interesting to watch. And I like Cameron Diaz. I'll probably see this in the theater. But in a summer where audiences are quickly getting tired of formulaic action movies, I don't see a lot of reason for optimism.

Stock: Short

Call: Short

Put: Long

CX: Short

Blockbuster Warrant: Short, when it IPOs tomorrow.

Update Sunday night: Yep, it bombed.$20 million over the weekend, plus $7 million on Wednesday and Thursday. Not looking good for Mr. Cruise. Good thing he took a pay cut - supposedly he was paid $11 million upfront, rather than his usual $20 million. Doesn't look like he is going to get much of a percentage of the gross, either. Oh well. I'll probably still see it in the theaters.

June 18, 2010: Toy Story 3, Jonah Hex, Cyrus

We're settling in to summer, with a genuine blockbuster, a wannabe blockbuster that looks like it will be anything but, and a sort-of arthouse funky comedy.

First up, the blockbuster, Toy Story 3 (TOYS3). This is the franchise that started other trends - great movies from Pixar, computer animation, animated movies that look like they're for kids, but are really for adults. The anticipation is reflected in the stock price; it's $288, or about a $106 million opening. It's gone mostly up, quite steadily, although not quickly. There was buzz on this one for a long time. This isn't a holiday weekend, so there's no funky adjusting. It's not opening on a Thursday, although I am sure there will be midnight screenings tonight. The strike price is H$110, which is just about right, although just slightly higher than the stock price would indicate. The call (TOY3CA) is doing quite well, thank you very much, at H$5 and a half. The put, however, is also doing rather well, aiming at H$4. The CX derivative is at H$324, although it went through a very different trajectory, hitting H$358 before coming back down. Strike price for the blockbuster warrant (BWTOY3) is H$350. That's at $8 and change, so it's not busting out. The feeling I get is there is a lot of enthusiasm, and potential excitement, but also some caution. We've seen some bubbles burst of late. But we've also seen some surprises, notably last weekend, with The Karate Kid blowing away expectations. One of the cautionary tales was Shrek 4, although that should not have been that surprising, since the franchise was clearly wearing out its welcome, and the third movie was not that well received. Pixar hasn't really had a bad movie, or even a movie that was less than very well-received. This already has a 9.4 rating on IMDb, which is great. It has a virtually unheard-of 100% ratings on rottentomatoes.com. Unheard of, of course, except for the first two, which also have 100% ratings. So the two big questions of late: am I in a bubble? and Is there more potential on the upside or downside? would seem to be answered thusly: I seriously doubt I am in a bubble. The reputation of Pixar and these particular movies is very well-known. Extremely well-known. There isn't much downside. Shrek made $70 million, with mediocre reviews. About the only potential downside is that many members of the audience have severe sequelitis, but this is still a franchise with a reputation for originality. It's opening on 4,000+ screens. The studio is going wide, I'm going long.

Stock: Long

Call: Long

Put: Short

CX: Long

Blockbuster Warrant: Long

Next up is Jonah Hex (JOHEX). There are lots of reasons for uncertainty with this movie. It's based on a comic book that I have never heard of. I'm not clear on what, if any, superpowers the title character has. He is intentionally unattractive. The actor playing him is well-known and respected (Josh Brolin), but not in the opening-a-blockbuster-by-himself league. The hot actress (Megan Fox) may have already outlived her 15 minutes. The director, Jimmy Hayward, doesn't have much relevant experience, but he does have some good movies on his resume, ironically at Pixar. I find it strange that he was chosen to direct this, but I could be missing something. The stock is tanking, down to H$36 from H$103. That's really not good. The strike price is H$20, which, tragically, absurd by now. Call (JOHECA) is below H$1, while the put (JOHEPU) is above H$5. There are only 9 reviews on RT, but with that, it's at only 11%. CX derivative is at H$51, and I think it's that high only because it hasn't had enough time to drop. The strike price for the BW is H$80, which is just sad. It's at 19 cents, down 13 cents today. Almost makes you feel sorry for whoever still has it long. I can't find a single reason to be optimistic about this movie.

Stock: Short

Call: Short

Put: Long

CX: Short

BW: Short

Finally, we have the most intriguing movie of the weekend, at least from a box-office-potential perspective. Cyrus (CYRUS) is sort of a romantic comedy about a single woman, whose son interferes with her dating life. Sounds interesting. The trailer isn't the greatest - John C. Reilly plays a guy who seems a little socially awkward, but who ends up with Marisa Tomei. Jonah Hill plays her son, who proceeds to make life even more awkward. Could be brilliant, could be one of those movies that polarizes audiences. Stock is H$12, down from a high of H$22. Looks like the buzz has worn off a bit. There are no derivatives. It's doing quite well on RT, with an 82% rating. It's only opening on 4 screens this weekend, so it's obviously not adjusting. I'm going to call it anyways.

Stock: Short

Update Friday morning: Both stocks opening wide are moving in the direction I predicted: TOYS3 is up, while JOHEX is down, to H$30. If it wasn't so completely devoid of interesting qualities, I would suspect that would be a buy. But it's still an $11 million opening weekend, and there is some room between that number and zero. Maintaining all positions.

Update Sunday night: Mostly a positive weekend. Toy Story 3 came in at $109 million, almost exactly at the strike price. The stock technically adjusted down, but only H$5. Considering that it was at almost H$300, that's not a great variation. It's an obvious hold long to delist, Also technically, I was wrong on the options, although since it is so close to the strike price, I am going to wait for the final numbers tomorrow. I was right about the CX derivative, which adjusted down quite a bit. The BW is maintaining about the same price, so that's tough to call at this point.

I did nail JOHEX, which is apparently a God-awful piece of garbage. Hard to believe a movie with a strike price of H$20 came in at $5 million. I shorted it at H$79. It's currently at H$13, and I would bet it will delist around H$10. Made a fortune on that one.

Cyrus had a great weekend at its four theaters, so I am reversing position and going long on that one.

Update Monday night: Wow, that was close. Looks like it was a good call for me to wait until today to determine whether or not I was right about the TOYS3 calls. I was, in fact, right about both: it officially cleared $110.3 million, just barely above the strike price, right on the sweet spot. Ideally, it would have been perfect if I had shorted the call, but it cashed out on the plus side, so I'm all good.

June 11, 2010: The A-Team, The Karate Kid

We're going back to the 80's this weekend, with a movie based on a TV show from the Me Decade, and a remake of a classic from that era.

First up is The A-Team (ATEAM). Four Special Forces guys from the military (I'm not sure if we're supposed to know what branch of the military they are actually from) are convicted of a crime they didn't commit, so they go on the run and proceed to blow things up in the process of being cool. I have to admit that I am looking forward to this movie, regardless of how utterly nonsensical the plot turns out to be. If you look in the dictionary under "middle-aged white guy guilty pleasure," this would be right there. The stock has followed the classic wannabe-blockbuster bell curve, hitting H$149 before coming back down to earth - it's currently at H$100, or about a $37 million opening weekend. Strike price is $35, right on target, unlike last week's batch of mispriced options. Call (ATEACA) is at H$3, very much in sync with the stock price. Put (ATEAPU) is, however, also above H$3, so we have divided opinions in option-world. Critics aren't excited, with a 51% rating on rottentomatoes.com. The plot, I am sure, is largely irrelevant. But so was the plot in the original, as far as I can remember. The most memorable thing from that entire show's run was Mr. T's line "I pity the fool!" This is purely an exercise in style. It's going out to 3,500 theaters, but, more significantly, it doesn't have a lot of competition. CX derivative is at H$112, down from an absurd high of H$177. The strike price for the blockbuster warrant is H$120, a reasonable guess, but it's trading just above H$3, so not much optimism there. As an exercise in style over substance, it generates a lot of buzz, but not much deep affection. I would like to see it in the theater, but I won't be crushed if I don't. Time to ask the question: is there greater potential on the upside, or the downside? Looks like the answer is the downside - it might open above $35, but it's not looking likely. I'm more comfortable with something between $30 and $35.

Stock: Short

Call: Short

Put: Long

CX: Short

Blockbuster Warrant: Short

Next we have The Karate Kid (KFKID), starring Jackie Chan and Jaden Smith, son of Will and Jada Pinkett-Smith. I have to admit that I have never seen the original (it's on the list), but I am familiar with the idea. I don't have a lot of interest, but apparently a fair number of other people do: the stock is at H$94, right near the high, although it is down H$2 today. That's about about a $34 million opening. Strike price is very close to that, H$35. Call (KKIDCA) is, however, illustrating that fine difference between $35 and $34; it's below the IPO, at H$1 and change. The put (KKIDPU) is heading in the opposite direction, well above H$4. The CX derivative, as most do, is dropping from a high price, in this case, to H$97, down from H$110. Strike price for the blockbuster warrant is H$100, also reasonable, and also looking possible, but barely: it's at H$4 and a half. Critics are surprisingly positive, with a 58% rating on RT. That's not much better than the rating for A-Team, but the reviews feel better. There's a reason to remake The A-Team: explosions are more fun on the big screen. I have heard many complaints about remakes and sequels; it's why I started The Original Ideas Fund. I have a strong gut instinct that this movie, even if it's good, will be a victim of remake fatigue. Much more potential on the downside, methinks, even if it's going out on 3,600 screens.

Stock: Short

Call: Short

Put: Long

CX: Short

BW: Short

Update Friday morning: It's not looking good for either of these releases. KFKID is down H$3.50, and ATEAM is down H$6.50. Fairly obvious what to do. Maintaining all positions.

Update Sunday night: Well, that was quite the surprise. KFKID opened with $56, ridiculously above expectations. The A-Team opened at $26 million, which was expected only insofar as I was predicting an adjustment downwards. So what the heck happened? Someone suggested that if you don't show many movies to a particular segment of the audience for a while, they will respond really well when something finally shows up that they might like. I wasn't aware that the family movie genre was lacking in product, but that sounds about as plausible as anything. Still open for suggestions.

My mistake this week was not paying attention to the trend line for KFKID, and lumping it in with ATEAM as an 80's retread. KFKID did NOT experience the bell curve, it was still on a strong trajectory up. Yet another lesson learned.

May 28, 2010: Prince of Persia

Here we are, in the beginning of blockbuster season, and we have our first Jerry Bruckheimer extravaganza! How exciting. Prince of Persia: The Sands of Time (PRSIA), is based on a video game. That would be grounds for groaning, were it not for the fact that Mr. Bruckheimer also produced Pirates of the Caribbean, a great movie based on a Disney theme park ride. Still, the history of movies inspired by video games is not a glorious one. I would review that history, except that I'm not actually all that aware of it, and I'm not all that interested in doing the research. This does not look like a difficult movie to figure out. Stock is at H$94, down from H$141. That's what we call "tanking." The strike price is H$60, which predicts a stock price of $162. Wow, I can't remember a strike price as far out of sync with the stock price as this one. H$94 predicts an opening weekend of about $35 million. The CX derivative has been on pretty much a nosedive of late, dropping from H$176 to H$108 today. Somebody lost some money on that one.

I liked reading this line on the stock page: "A young prince finds a powerful artifact that has the power to destroy mankind through a massive sandstorm."

That's three cliches - "young prince," "powerful artifact" and power to destroy mankind" - in one sentence. I'm bored with the CGI just watching the trailer. I have no idea what the plot is, beyond some hot guy battles lots of bad guys, Ben Kingsley looks worried, and some hot woman trades some cool dialogue with aforementioned hot guy. Oh, almost forgot: the blockbuster warrant has a strike price of $120, and it's sinking fast, too, from H$12 to H$4, presumably on its way to oblivion.

I'm sure it's going out on lots of screens, again, I don't even want to do the research. It's scoring better with critics than I was expecting, with a 46% rating on RT. That, I can just about bet, is because it manages to beat absurdly low expectations. In other words, some people felt that it wasn't a complete waste. I am not finding out either way.

Stock: Short

Call: Short

Put: Long

CX: Short

Blockbuster Warrant: Short

Update Friday morning: The stock is up H$3.50 this morning, at 9:30 am Pacific. It looks like it might beat those low expectations, and it is Memorial Day weekend. I am maintaining my positions, but buying 10,000 shares long, just in case.

Update Monday night: So hedging didn't work out, but otherwise I nailed this one. It opened with $37.7 million, not even within striking distance of the strike price. Adjusted down from H$101 to H$83.

May 14, 2010: Just Wright the Letters to Juliet, Robin Hood

Now that summer is here, we have a good mix of movies, the occasional drama and romantic comedy competing for attention with the blockbusters. Plucky little things, those dramas and romcoms. And, of course, we have the inevitable blockbuster that isn't, where the second part of "blockbuster" is the more apropos word. We may have one of those this weekend.

First up is a romcom with Queen Latifah and a rapper named Common, Just Wright (JUSTW). I'm not clear on why you would call yourself something that literally describes you are lacking in any kind of unique quality, unless it's a play on words - it's very uncommon, I suppose, to call yourself Common. Regardless, I am, as you might have guessed, not all that familiar with Mr. Common's work. I am more familiar with Queen Latifah's work onscreen, and just loved her in Stranger Than Fiction. It doesn't hurt that that is one of my all-time favorite movies. The stock had a very nice rise for a few weeks, going pretty much straight up, but it has been dropping precipitously for the last week or so. It's at H$27, down from a high of H$37. Strike price is H$10, a good price. The call (JUSTCA) is down to H$1 or so, roughly in line with the stock. The put (JUSTPU) is at H$3, which seems on the pessimistic side. It's only going out on 1,800 screens, not a great release. Critics are not impressed, with only a 33% rating on rottetomatoes.com. It sounds utterly predictable and safe, which is both a good and a bad thing. But it doesn't sound terrible, which counts for something. I'm looking for the sweet spot, around $10 million, right between the call and put. There are fairly moderate expectations, which, hopefully, will not be hard to beat. But this bears careful watching. Note: For some reason, there is not a CX derivative. Not sure why.

Stock: Long

Call: Short

Put: Short

Next up, with better prospects, is Letters to Juliet (LJULT), looking like something between a romantic comedy and a romantic drama. Doesn't look funny, but doesn't look like a tearjerker, either. Looks quite inspiring, just maybe. It's an intriguing idea: a woman vacationing in Verona, Italy, where Romeo met Juliet, finds a letter from 1957. She eventually reunites two long-lost lovers. Very sweet. The stock has been rising steadily, even this week. It's currently at H$48, a high. Hmmm. Looks like we might have us a sleeper hit on our hands. It's going out on 2,800 screens, and it doesn't have a lot of competition right now. Strike price is H$20, which is way optimistic. Call (LJULCA) is, whaddya know, barely treading water. If this makes the strike price, we will know we have a sleeper hit. Put (LJULPU) is also predicting sub-$20 numbers, currently around H$3 and a half. The CX derivative is actually behind the stock, at about H$45, which is an interesting sign. Really suggesting a sleeper hit with this one. Critics are not enthusiastic about this one, either, possibly given that it looks completely predictable and safe. But it also looks great, and the idea of a romantic movie with an older woman at the center of it (Vanessa Redgrave) is kind of nice. And I just love the shot of her long-lost love showing up riding a horse. Completely cliched, but utterly charming for the right people.

Stock: Long

Call: Short

Put: Long

CX: Long

Finally we have the blockbuster wannabe that looks like it might very well be a bust, Robin Hood (RBNHD). Russell Crowe and Ridley Scott team up in a movie that just about screams "Gladiator in Sherwood Forest." Although there are also shots in the trailer of a bunch of ships landing on a beach, and being met with fierce resistance. Which also suggests "Saving Private Ryan in Sherwood Forest." Regardless, this looks like an action-adventure movie that happens to take place in medieval England and happens to feature one of the iconic guerrilla warriors of history. It looks quite serious, with many sobering scenes of old men passing down wisdom to young men, and the young men avenging the old men, with most of it shot in shades of grey, green, khaki and drab. With the occasional orange when there is firelight present. I am not optimistic, and neither, apparently, is anyone else - the stock is down to H$91, from a high of H$156. That's a catastrophic drop. Strike price is H$40, a once-reasonable target that is looking increasingly untenable. The call (RBNHCA) is still above the IPO, at H$3, but it's dropping, and I expect it to continue on that trajectory. The put (RBNHPU) is rising, as expected, aiming at H$4. The CX derivative is still at H$117, but it had farther to drop, coming from a high of H$168. It's going out on more than enough screens, but critics are not excited, with only a 44% rating on RT. And the positive reviews are middling in their praise, struggling to find some justification for approval. Harry Knowles, in a superb review, just shreds it, calling it a "colossal failure," and justifying that description with a highly detailed outline of the actual history involved, and why this movie should have nothing to do with that actual history - it should just be a movie about Robin Hood, the idea, the legend, the myth. We're looking at a bomb of possibly historic dimensions here.

Stock: Short

Call: Short

Put: Long

CX: Short

Update Friday morning: Robin of the Hood is doing well this morning, up H$4. This is not surprising, given the beating the stock has taken over the last month. Just Wright is looking a little more right, up H$1.50, while Letters to Juliet is down from its high, down a buck and change. All of this feels like noise. The buzz on Robin Hood is just relentlessly negative; even the positive reviews are just barely that. Iron Man presents a strong contrast because its very stylized, and just plain fun. Robin Hood looks way too serious for the mood of the audience right now. Expectations for Just Wright are fairly low, and I expect they will be beat without much trouble. The one I am most nervous about it Letters. It might open a shade below where it is now, but my opinion on that is not strong enough to switch positions. OTOH, I am expecting it to build. This movie looks like a long-term bet. Some people are going to hate it, but some people are going to be thrilled that there is something for them in the theaters. Maintaining all positions.

Well this was sort of an interesting weekend for TEQP-HSX. I got all the stocks wrong, but I got all of the options right, and one of the two CX derivatives right. I wasn't far off on the stocks - RBNHD adjusted up by a little more than H$5, JUSTW was down by a little less than H$3, and LJULT (the big loser) was down by H$6. So RBNHD and LJULT each reversed the trend that they were on, while JUSTW maintained the trend, but also went against the movement on Friday. The lesson for this week is pay close attention to trends, but be clear on how much weight to give to them. The trend with RBNHD was right, and the market was basically right. JUSTW did not have much potential, and it was fairly predictable. LJULT had been surging, but didn't have a lot of momentum. Not a great weekend, but not bad. I'm just glad I shorted RBNHD at H$107.

Holding all short to delist.

May 7, 2010: Iron Man 2

Oooh, now we're talking. Summer blockbuster season is here! A time for the deep frivolity of ridiculously expensive toys, hundreds of millions of dollars spent on the ephemera of physically impossible images captured forever on whatever is being used to capture images these days. Sometimes I am deeply conflicted about the almost total triumph of commerce over art for the next three or four months, but then I remember that the commerce pays for the art. Then I stop thinking.

There's only one movie opening this weekend, because it's one of the most anticipated movies of the year. That would be Iron Man 2 (IRNM2), starring Gwyneth Paltrow, Scarlett Johansson, lots of seriously avant garde heavy metal couture, and a couple of guys who are really enjoying their respective comebacks, Robert Downey, Jr., and Mickey Rourke. The plot consists of some bad guys doing something bad, and Iron Man stopping them. At least that's what I am guessing. They had me at "Gwyneth Paltrow plays the ultra-competent . . ." For me, the rest is icing on the cake. The only question before us today is, how many bazillions will it make this weekend? The stock is trading just under H$400, currently H$391, down slightly from the high of H$396. Rather dizzying heights, these prices. That translates to an opening weekend of H$145. The original opened with $98 million, so the sequel would have to do significantly better than that. However, in a quirk of distribution, Iron Man 2 has already opened in other territories around the world (to beat the World Cup), and it's doing quite well. HSX set the strike price at H$155, which is actually quite a good guess. The call (IRN2CA) is aiming at H$7, so we're talking about a weekend box office gross of over $160 million. I remember the first Spider-man opening with $114 million. I remember seeing the first day's total of $40 million, and thinking that maybe it was a typo. Nope. Today's put (IRN2PU) is not too badly either, at just above H$3. This is not surprising, given the uncertainty at this level of hype, where a 10% difference equals $16 million. The CX derivative is above the stock price, also unsurprising, currently at H$413. Also unsurprising is that both the stock and the CX derivative have been on pretty much an upward march. Oh, yeah, it's going out on 4,000 screens, basically as many as possible. Many critics have seen it - this one sure ain't being withheld from the chattering classes - and they mostly like it, giving it a 70% approval rating on RT. That's nice, although I am hard pressed to imagine a movie less dependent on critical approval for success. As long as it works, I'm good. Personally, I can't wait. Go Tony! Knock 'em dead, Pepper Potts!

Stock: Long

Call: Long

Put: Short

CX: Long

Update Friday morning: Mr. Tony Stark's stock is down this morning. It was down H$9 at one point, but now it was only down H$5.25 at halt. It's too late to do anything different, but, for the record, I am maintaining all positions. Given the level of hype and uncertainty, I would be surprised if there weren't some profit-taking.

Update Sunday night: Well, the mistake this week - or two mistakes, really - was the same one I've made several times recently. I didn't use my questions, and, as a result, I didn't ask the question: "is there greater potential on the upside, or the downside?" I really should have asked that question, because there was a hell of a lot more potential on the downside than the upside. Iron Man 2 opened to a very respectable $133 million. That, however, was $22 million below the strike price for the options. The stock price adjusted down H$34. Really have to come up with that list of questions.

April 2, 2010: Why Did I Clash With The Titans?

It's April Fools Day today, but I'm not going to spring any surprises on anyone. Looks like Miley Cyrus is doing well at the box office; The Last Song snagged $5 million at the box office on Wednesday, so the opening weekend should be solid. Also opening this weekend is Tyler Perry, back wondering why he got married, and a remake of The Clash of the Titans. The Original Idea Fund will not be investing in any of these movies.

Tyler Perry is a one-man moviemaking machine these days, cranking them out faster than Woody Allen. He's got a niche, he's milking it, and he's doing a great job. Why Did I Get Married Too (WDIG2) fits his formula and his plans for world domination. The stock has been climbing quite steadily, and is currently at H$54, or a $20 million opening weekend. The original made about $55 million, so we are looking for this one to outgross the first. Given Perry's record of success at establishing himself as a reliable brand, that's entirely possible. The strike price was set somewhat optimistically at H$25, which would imply a stock price of H$67. Not impossible, but not likely. The call (WDI2CA), not at all surprisingly, is down to a buck and change. The put (WDI2PU), equally unsurprisingly, is soaring, above H$3. It's going out on 2,100 screens, a good release, but not great. There is only one review on rottentomatoes.com, which suggests that it was not screened for critics, which is somewhat disconcerting. The CX derivative is almost exactly the same price as the stock, which is a tad unusual. The one review on RT, from Armond White of the New York Press, makes the very good point that this formula is starting to feel stale. I wouldn't know, not being all that familiar with Mr. Perry's work. My guess is that there is still some gas in the tank, but I will be watching this one closely tomorrow morning.

Stock: Long

Call: Short

Put: Short

CX: Long

At the other end of the demographic scale, although not that far away on the art-vs.-entertainment scale, is Clash of the Titans, a remake of the 1981 movie. I haven't seen the original, and it's not "on the list," i.e. the list of movies that I think I should see, but haven't. My impression is that it's famous more for the special effects than the plot, of which I know very little. The stock has been climbing quite steadily, just like Mr. Perry's movie, and currently is floating just under H$190. That's a $70 million opening weekend, somewhat below the strike price of H$75. The buzz is quite substantial, as evidenced by the call (CLASCA), which is about H$5. That would mean an $80 million weekend, or an adjust to $216, or up by H$26. The put (CLASPU), meanwhile, is up today, while the call is down. I am sensing a slight realignment, with the call dropping and the put moving up. The CX derivative is down almost H$3 today, just about level with the stock. It's going out on 3,700 screens, a good wide release, as is expected. Many of those screens will be showing it in 3D, although it's not clear how many, since there has been much discussion of late about the shortage of 3D screens, with more demand for 3D screens that supply at this point. It wasn't shot in 3D, a minor problem, but one that didn't slow down the Alice in Wonderland juggernaut. I'm not really clear on what the plot is, other than it being a clash of titans. The trailer does not give away much of the plot, but is nicely edited and fast paced. I'm sure it will be quite entertaining, but not enlightening in any way. Critics are fairly savage, with only a 35% approval rating on RT. Normally that wouldn't matter much with a movie like this, but my gut tells me that a fair number of people are bored with too much CGI, which is what this feels like. One of the most important critics, Harry Knowles of Ain't It Cool News, rips it apart. I don't always agree with him, but the man knows his movies, and he just shreds this screenplay. If you've lost the head geek, you're in trouble.

Stock: Short

Call: Short

Put: Long

CX: Short

Update Friday morning: WDIG2 is up almost H$4, so that is looking good. I am maintaining all positions there, although I am least certain about the call - this may very well bring in more than $25 million this weekend. CLASH, on the other hand, is not looking any better than it did yesterday. Earlier this morning it was down almost H$14. I don't think I have ever seen a drop that dramatic on an opening day. It's still down almost H$7. Definitely maintaining the short there.

Update Sunday afternoon: Well, it was a great weekened here at TEQP-HSX. I nailed just about every prediction. CLASH did come in at the l0w end of expectations, and way below the strike price, at $61 million (with $2.5 million previously, presumably Thursday night). It dropped from H$186 to H$168. Tyler Perry, once again, confounded critics and delivered the goods. The one mistake that I made was the one prediction I was most uncomfortable with, which was the call on WDIG2. It opened at $30 million, nicely above the strike price, and adjusted up from H$59 to H$81. Nicely done, Mr. Perry. I've learned this lesson once, and apparently I will have to learn it again: don't underestimate Tyler Perry. Miley Cyrus did marginally better than expected, clearing $16 million from Friday to Sunday, and $9 million on Wednesday and Thursday. LSONG adjusted up to H$53, from H$48. I am staying short on CLASH to delist, and long on the other two, assuming that word of mouth is decent.

March 19, 2010: The Bounty Hunter, Diary of a Wimpy Kid, and Repo Men

Three moderately interesting movies this week, about a bounty hunter with a special target, a wimpy kid, and some men repossessing unique property.

First up is The Bounty Hunter (BOUNT), Gerard playing the title character, who has to hunt down his ex-wife, played by Jennifer Aniston. That's an interesting premise. The trailer is funny, and it has a certain appeal. Stock is in the mid-50's, down from a high of H$65. Strike price is H$20, with the call (BOUNCA) at H$3 and a half. The put (BOUNPU) is below the IPO price, about a buck and a half, so those signals are in sync. The reviews, however, are utterly savage, with an 8% - and that's a weak 8% - approval on RT. I'm not sure what's up with Cantor this weekend, it looks like the practice site is no longer working. Which is a bummer, because I was having a very good time on it. C'est la vie. I'm not a fan of either Butler or Aniston, and neither of them impresses me in the trailer.

Stock: Short

Call: Short

Put: Long

Diary of a Wimpy Kid is based on the very popular books of the same name. I've never read them, but apparently kids eat them up. The stock (WIMPY) is at H$49, down H$3 this morning (Friday), never a good sign. Strike price is H$20, which seems reasonable, but the call (WIMPCA) is just above a buck, while the put (WIMPPU) is above H$3. Reviews are mixed, at 56% on RT. It's going out on 3,000 screens, a regular wide release. This is highly targeted, but narrowly targeted. Some kids movies are also appealing to adults - this doesn't sound like one of them.

Stock: Short

Call: Short

Put: Long

Repo Men is a futuristic thriller about men who repossess body parts, the way repo men today repossess cars. That's a disturbing idea. I was intrigued at first, but recently I learned that it was shot at least 2 years ago, so it's been sitting on the shelf. Never, ever a good sign. Stock (REPOS) is at H$31, down almost H$3 today, and down from a high of H$46. Strike price is H$15, but the call (REPOCA) is at all of 70 cents, while the put (REPOPU) is at almost H$4. It's at only 22% on RT. It's going out on 2,500 screens. Not a good sign in the bunch.

Stock: Short

Call: Short

Put: Long

Update Sunday night: This was one of those weeks when the market got a couple of things almost exactly right, so there wasn't a lot of excitement. WIMPY and BOUNT both came in at $21 million, WIMPY ahead by a few hundred thousand. Jennifer Aniston, her hair, and Gerard Butler and his chest adjusted down less than 50 cents. That's technically a win for me on the stock, but it's meaningless. It just means I don't have to worry about shorting it tonight in anticipation of the drop tomorrow morning. WIMPY adjusted up about H$8, slightly better, but not by much. It's got an A- rating on Yahoo! Movies, which is not bad. That score always has to be taken with a large grain of salt, but it's not a bad sign. So I'm going to go long to delist. REPOS was, in fact, a total bomb, only clearing $6 million. And to think I was once optimistic about that one. Good thing I caught it in time.

My record this week is 6 for 9, all three calls, the stock for BOUNT and REPOS, and the put for REPOS. Not a bad week for me, but also not a great week for movies. I have no plans to see any of these, and I think they will be forgotten in a year.

Note about The Ghostwriter. Roman Polanski's latest opened wide this weekend, which I didn't realize, and I forgot to include that in my post. Sorry, Mr. Polanski! I'll be sure to pay better attention next time. For the record, it had a good weekend, but only adjusted up 20 cents.

March 12, 2010: Green Zone, She's Out of My League, Remember Me, Our Family Wedding

A solid crop of movies this weekend, but it doesn't look like any of them are going to break out.

First up is Green Zone (GREZN), Matt Damon starring in a movie about searching for weapons of mass destruction in Iraq. It's directed by Paul Greengrass, who did the second and third Bourne movies. That's a successful pairing, Damon and this director; those movies opened with $52 and $69 million, respectively. Expectations are lower for this one, with the stock in the low 60's. Strike price is H$25, a reasonable bet. The call (GREZCA) is above H$3, a good sign. That would put the stock at H$75. The put (GREZPU), however, is also above H$3, and has had a steadier march up. The CX derivative on HSX is at H$60, dropping substantially of late. Reviews are decidedly mixed, at 50% on rottentomatoes.com. My gut tells me that the floor for this movie is $20 million, and that there is more potential on the upside to be surprised than on the downside. Definitely one to watch tomorrow morning.

Stock: Long

Call: Long

Put: Short

CX on HSX: Long

Cantor: Long

Filling in the "disposable raunchy teen comedy" slot is "She's Out of My League," (SHOML), about an average-looking guy who scores with a seriously hot girl. It's a good premise for this kind of movie. Stock is in the high H$30's, just off the high. Strike price is H$15, with the call (SHOMCA) at H$3. That's a stock price of H$48. Put (SHOMPU) is at H$2.52, so mixed signals there. Just watched the redband trailer, which is funny. Signals are looking good. It's at 41% on rottentomatoes.com, which is not surprising, and probably not all that relevant. I have a feeling the target audience will like this. No votes on IMDb, kind of a bummer.

Stock: Long

Call: Long

Put: Short

CX on HSX: Long

Cantor: Long

Robert Pattinson, who broke big with the Twilight series, shows up in another movie, "Remember Me," (REMBR) a movie with an utterly forgettable title. The plot also sounds fairly forgettable, like a coming of age story with some good casting. Besides Pattinson, Chris Cooper and Pierce Brosnan play distant fathers, and Emile de Ravin is the love interest. I have zero interest in this. Sounds like an arthouse movie that got lucky. The stock is at H$34, down from a high of H$39. The call (REMBCA) is below the IPO price, not surprising, and not a good sign. The put (REMBPU), meanwhile, is above H$3. So far, every signal is pointing to a flop. The CX derivative on HSX is also down, to about H$35. That's another one. On Cantor it is, inexplicably, at $43. Reviews are not good, at 38% on RT. My impression is that it might attract a good female crowd, but men are going to stay away in droves. The average rating on IMDb is 5.4. Wow, that's not good.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Last, and probably least, is "Our Family Wedding," (FAMWD) about a wedding between an interracial couple. The twist is that he's black, but she's not white, she's Hispanic (although Hispanics can be of any race). It's a very standard premise, and sounds highly predictable. The cast is decent, but no superstars. Stock is H$23, and it's nosediving. Movies with black or Hispanic casts are occasionally underestimated on HSX, and that might be the case here, but I don't think it's going to beat the market by much, if anything. Strike price is H$10, which suddenly looks optimistic. Call (FAMWCA) is barely above a buck, which is a terrible sign. The put (FAMWPU) is, as can be expected, doing well, coming close to H$3. CX derivative on HSX is at H$29, also nosediving. It's at 4% on RT, which is about the strongest signal possible for "bomb." Sounds like it could be offensive to people of all races.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Update Sunday night: Not a bad weekend for me. I missed Green Zone and She's Out of My League, but nailed Remember Me and Our Family Wedding. I noticed that Green Zone was dropping on Friday night, so I sold my the shares on Cantor that I had bought in the low 70's (whew!). I bought 3 shares at $62, as a hedge. So I lost a tad bit there, but not much. Now I regret not shorting it at $91! Turns out that the Iraq war problem affects major stars, as well. My problem with the marketing is that I couldn't tell quite what the movie was about. Is he looking for weapons of mass destruction? We know there weren't any. So I wasn't quite sure what this movie was about. I overestimated the audience for SHOML. A movie like that really has to rock to break out of its niche. I also forgot that the other studios will probably be dumping bad movies the weekend after a major blockbuster like ALCNW. More lessons learned.

March 5, 2010: Brooklyn's Finest and something from Tim Burton

Two movies are opening this weekend, Oscar weekend, one a generic cop movie with a solid cast, and the other another visual-effects spectacular from the usually delightfully twisted mind of Tim Burton.

First up, let's look at the cops, Brooklyn's Finest (BRKLN). I have this funny feeling that the title is sarcastic, but I'm not entirely sure. These Finest include Richard Gere, Don Cheadle, Wesley Snipes, and Ethan Hawke. And Ellen Barkin. Good actors all, but none have really opened a movie on their own in at least a few years. Opening on Oscar weekend, it's not being targeted at the arthouse crowd, that's for sure. Stock is at H$31, and has been dropping from a high of about H$40, although my guess is that it has bottomed out. Strike price is H$15, which is rather on the optimistic side, since the stock price predicts an opening weekend around $12 million. The call (BRKLCA) reflects that unfortunate strike price, as it is around H$1. The put (BRKLPU), absolutely unsurprisingly, is above H$3. The CX derivative on HSX is around H$32, after nosediving steeply. It's also at $32 on Cantor. It's going out on 1,900 screens, a decent release, but not great. Reviews are not terrible, but not good - it's at 31% on rottentomatoes.com. I think these prices are all about right, or maybe on the high side. I'm looking for right around $10 million.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Then there's the big movie of the weekend and the month, Tim Burton's Alice in Wonderland (ALCNW). Lots of anticipation for this one. Price on HSX is just shy of H$200. Strike price is H$70, with the call (ALCNCA) above H$6. Haven't seen that in a while. The put, of course, is underwater, at H$1 and change. The CX derivative on HSX is at H$226, so much higher than the stock. On Cantor, it's even higher, at $235. So the predictions range from about $75 million to $87 million. It's going out on a very wide number of screens. But the critics' reviews range from merely decent to downright savage. It's at 57% on RT, but it's a very weak 57%. I have a couple of problems with it. First, there are a couple of famous faces (Johnny Depp, Helena Bonham Carter, Anne Hathaway), but they are hidden beneath lots of makeup and CGI. That takes away a certain part of their appeal, notably that they are very good looking. It's in 3D, which of course raises the box office potential, but it wasn't shot in 3D; those effects were added in post. Tim Burton definitely has a very active imagination, the kind that creates worlds suitable for 3D, but I'm not sure he has the technical chops that, say, James Cameron does. The story is apparently quite different from Lewis Carroll's original. In some sense, that doesn't matter, because most people are only vaguely familiar with the story in the first place. But the replacement story sounds very generic-Hollywood. It's supposed to be a kids' movie, but I'm not sure I see this appealing to many kids. I think it will have a huge opening weekend, but then drop quickly.

Stock: Long

Call: Long

Put: Short

CX on HSX: Short

Cantor: Short

Update Monday night: Boy do I feel stupid. Hopefully this will go down as one of the worst mistakes of my movie stock investing career, because I hope I never make another doozie like this one. Shorting a huge blockbuster - what was I thinking? And less than a month after I got burned the same way on Valentine's Day. This is certainly a humbling business. I should have asked the classic question: is there more potential on the upside, or the downside? There was virtually no potential on the downside - this movie was pretty much a lock to make at least $70 million. You had four great brands working here - Disney, Tim Burton, Johnny Depp, and Alice in Wonderland. Certainly was a learning experience. It adjusted from H$205 to H$314. Brooklyn's Finest also adjusted up, although that was not really as surprising.

The big question is - how will ALCNW do over the course of its run? Movies with openings like this tend to drop over time. I'm staying with my short, in the hopes of somehow salvaging some kind of money from this. Also, there are some seriously strong negative reactions on Yahoo!, so I have the feeling the word of mouth will not be that great.

Update from last week: I was wondering how 2COPS and CRAZI would hold out long term. My bet was that CRAZI would benefit from a higher PSA, because fewer movie theaters would pull it. Looks like I completely misread that - 2COPS didn't lose any theaters, and CRAZI only added 3, a miniscule change. Another lesson learned.

January 29, 2010: Edge of Darkness, When in Rome

We only have two movies opening this weekend, and we are still in January.

When in Rome (WROME) is a cheesy romantic comedy starring Kristen Bell and Josh Duhamel, who I could not pick out of a crowd. She goes to Rome, and picks up some coins from a fountain of love. The men who threw the coins in the fountain fall in love with her, and follow her home. Sounds like it could be funny. Stock is not doing all that well; it's at H$27, down from a high of H$42, following the classic HSX profile of topping out just before the release. The strike price is rather unfortunately set at H$15, which is now absurd. The call (WROMCA) is sinking, as it should. The put (WROMPU) is doing quite well. The CX derivative on HSX is, of course, above the stock price, and dropping. On Cantor, it's above $30, just barely, but I suspect that won't last. The reviews are devastating, with only 6% on RT. It's going out on 2,400 screens, which sounds like it may be about 2,200 too many. Not hard to call this one.

Stock: Short

Call: Short

Put: Long

CX on HSX: Long

Cantor: Short

Mel Gibson is back in front of the screen in Edge of Darkness (EDRKN). It's a revenge movie, about a guy who is seeking vengeance for the murder of his daughter. It worked last year for Liam Neeson. Stock is at H$55, down from H$61. Not a bad drop, but I did see it drop H$10 earlier this week. Strike price is H$2o, right on target. Call (EDRKCA) is middling, just above the IPO price. The put (EDRKPU) is about the same place, a smidgen better. CX on HSX is at H$53, very closely following the stock. Same with Cantor. It's going out on 3,000 screens. Critics are generally positive, although far from effusive, with 60% liking it. It's an excuse for Mel Gibson to kick butt, but that sounds like a good thing. With all the signs this close to one prediction, I am going to go for the sweet spot, right at $20 million.

Stock: Long

Call: Short

Put: Short

CX on HSX: Long

Cantor: Short (where I had it originally)

Well, I came very close on both of these, but I technically got the stocks wrong on each. WROME cleared $12 million and adjusted up, but just a bit, from H$30 to H$32. EDRKN dropped, from H$53 to H$46, as it cleared $17 million. I was right about both of the calls, and right about the put for WROME. I was wrong about the put for EDRKN, but not by much. I was right about both of the Cantor predictions, which feels good. Mostly a positive weekend.

January 22, 2010: Angels and Doctors

There are two movies featuring men with wings opening this week. Plus Harrison Ford playing a doctor. It's still January. We have mild hopes for the Harrison Ford, but not much for the other two.

First up is Dwayne "The Rock" Johnson in "The Tooth Fairy" (TOFRY), about a hockey player who has to be a tooth fairy for a week. A literal fairy, complete with wings. We're in "high concept" territory here. I have a certain amount of respect for Mr. Johnson - he clearly has a sense of humor about himself, and he's taken Clint Eastwood's advice about a man knowing his limitations. I'm sure there is some entertainment value in this movie. The question for us today is how much. I'm guessing not a lot. The stock is at H$46, down from a high of H$54. Strike price is reasonably set at H$15, with the call (TOFRCA) at H$3 and change, and the put (TOFRPU) at H$2. A $15 million opening would translate to H$40.5, so the options and stock price are in alignment. The CX derivative on HSX is at H$52, and dropping. On Cantor, it's at $57, which feels too high. It's going out on as many screens as possible, at least 3,000, about what we expect. Critics are fairly savage, also what we expect - it's at 13% on rottentomatoes.com. I'm sure it will do a certain amount of business just by virtue of being a comedy. This kind of thing is very much a known quantity. I think the market has it about right. Time to aim for the sweet spot again, right around $15 million

Stock: Long

Call: Short

Put: Short

CX on HSX: Short

Cantor: Short

The next movie featuring a guy with wings is "Legion" (LEGIN) in which Paul Bettany plays the Archangel Michael, trying to save humanity from God's wrath. The ancient Israelites got Noah; we get Paul Bettany. I think the trailer looks good, but we have roughly the same phenomenon as we do with Tooth Fairy - very much a known quantity. Stock is at H$43, down from a high of H$51. Strike price is, again, set reasonably at H$15, with the call (LEGICA), again, above H$3, the put (LEGIPU) around H$2, and the CX derivative above the stock, floating around $50. Theater count is a little lower than TOFRY, around 2,400. There are no reviews on RT, which suggests that it was not screened for critics, which is never a good sign. On Cantor, it's at $42; I have it shorted at $55. Not a good sign in the bunch, other than the call. I'm playing this the same way I played TOFRY (love that symbol): looking for the sweet spot.

Stock: Long

Call: Short

Put: Short

CX on HSX: Short

Cantor: Short

Then there's a Harrison Ford movie, Extreme Measures (XMEAS), in which he plays a cantankerous but brilliant doctor. I seem to recall when he was a major movie star. I don't recall him playing too many cheerful, happy-go-lucky types, but when he played Han Solo or Indiana Jones, it was always with an incredible sense of style. Not sure where that went. It sounds like a very inspiring story - a father with two kids with a genetic disorder raises money for this eccentric doctor. I'm sure it is. But the stock is in the low H$20's, and the strike price is H$10, with the call (XMEACA) just above H$2, and the put (XMEAPU) a smidgen higher, around H$2 and a half. The CX derivative is at around the same place. It's a tad higher on Cantor, around $27. It's going out on around 2,500 screens or so. Critics are brutal, with only 13% approving, and several noting what I suspected, which is that it's basically a TV movie-of-the-week that escaped the small screen because of the presence of Harrison Ford. Still, there's a market for this stuff. Looking for the sweet spot again.

Stock: Long

Call: Short

Put: Short

CS on HSX: Long

Cantor: Long

Update Sunday night: A mixed bag. I hit the sweet spot on TOFY, and came close on LEGIN. Missed XMEAS; it fell short by a bit. I guess Harrison Ford's star power really has evaporated. Really should not have held XMEAS long on Cantor. Overall, I split the predictions exactly in half - 7 right, 7 wrong.

January 15, 2010: Book of Eli, Spy Next Door, Lovely Bones

The three movies this week are, hopefully, a bit better than the standard January fare. At least two of them look that way.

First up is Denzel Washington wandering a post-apocalypse wasteland in Book of Eli (BOELI). He's apparently trying to save the world by carrying a Bible somewhere. However, the trailer is mostly just him kicking ass in earth tones. Stock is at H$80, down from a high of H$97. This one has not suffered from lack of hype. The strike price is H$30, and the call (BOELCA) is at H$3 and some, but that's down for the day. The put (BOELPU) is above H$2, and also down today, but not by much. An H$30 strike price translates to H$81, almost exactly where it is right now. So the call is probably too optimistic, with a prediction of a stock price of H$90. The Cantor option on HSX is at H$89, but it has been extremely volatile, and that's also down from a high of H$97. It's going out on over 3,000 screens, which is good. But the reviews are not good, at only 44% on RT. I think Avatar will still be sucking up some action movie oxygen. On Cantor Exchange, it's at $86, down from a high of well over $100. None of the signs are good.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Jackie Chan is back in action in The Spy Next Door (SPYND). I'm sure it's a standard Jackie Chan movie, but with little kids. You know what you get with Jackie, and it's usually at least OK. He's not a young man anymore, but he still brings it. Stock is at H$31, down from a high of H$35. Strike price is H$15, which may have made sense a while ago, but doesn't now. Call (SPYNCA) is right at the IPO price. Put (SPYNPU) is above IPO, which makes sense. It's going out on almost 3,000 screens, but the reviews are atrocious, at only 7% on RT. Boy, that's horrible. The CX option on HSX and the option on Cantor Exchange are both in the mid-30's. Reviews that savage mean that, quite simply, it sucks. Even little kids occasionally have good taste.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Finally we have the most interesting - at least in terms of the backstory - movie coming out this weekend, The Lovely Bones (LVBON). Peter Jackson, he of LOTR fame, is trying his hand at serious drama. Based on a best-selling book by Alice Sebold, it tells the story of a 14-year old girl who is murdered, but doesn't quite make it to heaven. It's been in limited release for a month, and reviews have not been kind. The stock is at H$27, down from a high of H$60. Quite the drop. There are no options, since it's been out for several weeks. It's at 35% on RT, and many of the reviews are brutal. It's expanding from 57 screens to over 2,500. The CX derivative on HSX is still at H$40, but has dropped precipitously. On Cantor, it's in the mid-30s'. The book sold 15 million copies, so I think there is an audience for the movie still out there, even if it's not very good. The expectations are so low at this point that I think they will be easily beaten.

Stock: Long

CX on HSX: Short

Cantor: Long

Update Friday morning: Book of Eli is down a bit, not much, so my prediction looks good. Same with Spy Next Door and Lovely Bones. Jackie Chan's latest is down H$1.25. Not much, but it confirms the trend. Lovely Bones is up H$3.75, also confirming my suspicions that it will bounce back from terrible early reviews. Maintaining all positions.

A fairly good weekend for me, and mostly in line with expectations. I was off on BOELI, but not by much - it made $38 million, but the multiplier was 2.2, because of the holiday weekend, which I didn't take into account. It adjusted up H$3. SPYND brought in $13 million, so I was right about that one. Lovely Bones did much better than expected, with a take of $20 million. It adjusted way up, from H$31 to H$45. So I basically got two out of three right.

December 4, 2009: Armored, Brothers, Everybody's Fine

Good collection of movies this week, one standard action adventure flick, one war movie, and a family dramedy featuring Robert De Niro.

First up is Armored (ARMRD), about an armored car heist. Always a fun topic! It's got a solid cast, including Matt Dillon and Laurence Fishburn, although the director has the unfortunate name of Nimrod Antal. The stock has been moving up quite steadily, but dropped about a week ago. It hit H$35, and is currently at H$25 on HSX. On Cantor Exchange, it has had roughly the same tragectory. The CX derivative on HSX, on the other hand, has sunk like a stone in the last few days, and hasn't come back Strike price is H$10, and the call (ARMCA) is dropping, down below the IPO price. That makes sense. The put (ARMPU), meanwhile, is marching in the opposite direction, heading towards H$3. It's only going out on 1,900 screens, so it's not a very wide release. There's only one review on rottentomatoes.com. I'm not sure if that's because it's early (I'm writing this on Wednesday night), or because the studio doesn't plan on screening it. If it's the latter, watch out. There aren't a lot of good cheesy action movies out right now, with the possible exception of Zombieland, and that's already gone. Even if it's not that good, it should pull in at least $10 million this weekend.
Stock: Long
Call: Short
Put: Short
CX on HSX: Long
Cantor: Long

'Armored' Theatrical Trailer @ Yahoo! Video

Next up is Brothers (BRTHS). This one is a little more intense. It's about a pair of brothers, one of whom goes to Afghanistan. I'm going to end the description right there. It looks rather intense. Stock has been going up steadily, currently around H$20. The strike price is about as low as possible, H$5, with the call (BRHCA) optimistically trading above H$3, and the put (BRHPU) around H$2. This is interesting: The CX derivative on HSX is at H$18, but the stock on Cantor is at $33! That's a hell of a divergence. It's rolling out on 2,000 screens. It's only scoring 50% on RT. It's got a good cast, but the story seems like a downer, particularly with President Obama's decision to send another 30,000 troops to Afghanistan. The track record of war movies about Iraq or Afghanistan is not good. I would be surprised if it does more than $7 million.
Stock: Short
Call: Short
Put: Short
CX on HSX: Long
Cantor: Short




Finally, Robert De Niro stars in a quiet family drama as a widower reconnecting with his kids. This looks like quality. It's nice to see De Niro in a sober, simple movie. He deserves something like this. The title, Everybody's Fine (EBFIN) sounds like it both is and is not ironic. It's one of those things that you say sometimes because it's true, and sometimes because you hope it's true. The stock has been marching up, but is still only at about H$16. Mr. De Niro and friends are going under the radar. Except on Cantor, where the price is $27. Strike price is H$5 - not very high expectations for this week's releases! - with the call (EBFCA) doing reasonably well, and the put (EBFPU) tanking, as expected. The CX option on HSX is almost exactly in line with the stock, a good sign. It's the widest release this week, although it's only going out on 2,200 screens. It's at 57% on RT, a solid rating, if not great. It feels like a good holiday movie for people who want something without histrionics.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long

'Everybodys Fine' Theatrical Trailer @ Yahoo! Video

Update Monday morning: Well, I was wrong about all of the stocks, but not by much. Armored and Everybody's Fine turned out to be duds, while Brothers did slightly better than I expected. Apparently the weekend after Thanksgiving is a traditionally slow one, so studios tend to release weak movies this weekend. That's another thing I learned. It makes sense, tho, since the big Thanksgiving weekend movies are still popular, and taking up a lot of screens. Overall, I got 5 out of 15 calls right. But next weekend, things should be heating up quite a bit.

October 16, 2009: Law Abiding Paranormal Stepfather Goes Where The Wild Things Are

We've got a solid diversity of movies this week. An action thriller, a couple of horrors/thrillers, and one kid's movie with monsters. So no comedies.

Law Abiding Citizen (LATCZ) stars Jamie Foxx as an assistant DA and Gerard Butler as a man bent on vengeance after the justice system lets him down. Nice to see the white guy as the bad one. Foxx and Butler have both been in good and bad movies, and both are nominally good box office draws. It's directed by F. Gary Gray, a solid guy. Trailer looks good. Stock has been mostly up, but is retreating. It's at H$36, off from a high of H$47. The strike price is H$15, which looks a smidgen unrealistic, but the call (LACCA) is up H$3, so there's a chunk of optimism there. The put (LACPU) is below H$2, so the signals are in sync there. It's in the high $40's on the Cantor Exchange, which is a good sign. It's going to be interesting to see which is right - HSX or Cantor. It's going out on about 2,700 screens, not the widest release, but not bad. It's too early to get a good critical read. The signs are mostly positive.

Stock: Long

Call: Long

Put: Short

'Law Abiding Citizen' Theatrical Trailer @ Yahoo! Video

The first horror movie of the week is the more "normal" one, at least in terms of production and distribution. Stepfather (STPFT) looks like a decent proposition, a new addition to the family who isn't really Mr. Nice Guy. I find it scary, but I'm not a good judge of these things. The stock has never been very high, and has been drifting lower, topping out at H$22 and currently about H$17. That strikes me as very low. Strike price is H$10, which may have been a shade high, but H$5 would have been ridiculously low. Call (SPFCA) has been plummeting, and is barely above a buck. That makes sense, because this does not look like a $10 million opening weekend movie. Put (SPFPU) is rising, and may hit H$3. It should also be going out on about 2,700 screens. No reviews yet. Traders on Cantor are, again, a little more optimistic; it's above $20 there. I think this is underestimated by the market, and I'm not sure why. I think there's more potential on the upside than the downside.

Stock: Long

Call: Short

Put: Short

'Stepfather' Theatrical Trailer @ Yahoo! Video

The next movie is already the most profitable movie of the year, and will easily be one of the most profitable ever made, measured by return on investment. It was made for $11,000. Yes, for the cost of a decent used car. Paranormal Activity (PNACT) is taking the country by storm. Stock is at H$44, and has been going straight up. There are no derivatives, and it is not listed on Cantor. Which is a bummer, because I think it would be a great opportunity to make some serious cash. We're not really quite sure how many theaters it's expanding to, because the studio, Paramount, is asking fans to ask for it. My guess is that it will have an IPO (or ICO) on Cantor when it hits 650 screens, and they don't know if it will hit that many. It's at 85% on rottentomatoes.com. One note: it will adjust at previous box office + 3.0 x this weekend. Previous box office is about $9 million. Subtract that from H$44, you get H$35, which means that it has to do about $10 million. Guess what my call is.

Stock: Long

@ Yahoo! Video

And there's Where The Wild Things Are, one of the most highly anticipated movies of the year, based on the Maurice Sendak book. The stock (WILD) has exhibited the classic signs of hype and backlash; it marched steadily up to almost H$130, but has crashed badly in the last couple of weeks, down to the mid-H$90's. That's a bit of a recovery from H$89. The strike price is H$35, with the call (WILCA) above H$4. H$96 predicts a $35 million opening, so the call is a shade more optimistic than the stock, but not by much. The put (WILPU) is behaving as expected, dropping to below H$2. Traders on Cantor are much more optimistic, and it is at $115. It's the widest release of this week, on 3,500+ screens. Critics are mostly happy, with 67% approval on rottentomatoes.com, and many are absolutely in love with it. I'm not captivated - I'm not feeling the love from the trailer. But I don't want to bet against this kind of hype.

Stock: Long

Call: Long

Put: Short

@ Yahoo! Video

Update Sunday night: I had a moderately good weekend; I got three out of four stocks right but I only got 3 out of the 6 options right. My thinking on WILD could have been better - there was more potential on the downside than the upside. It did $32 million, which was very good, but still sort of what the market was predicting. $30 million was much more possible than $40 million.

The contrast between HSX and Cantor Exchange was interesting this weekend. HSX was closer on WILD, even though it was off. WILD had been dropping, and that trend was right. On Cantor, however, WILD exploded upwards; I shorted it at $115.25. Feeling really good about that right now. However, HSX was wrong STPFT and LACTZ; both had been drifting steadily down, but adjusted dramatically up, LACTZ by H$25, and STPFT by H$18. But both were trending up on Cantor by Friday, and the difference between HSX and Cantor was dramatic; LACTZ was trading in the $40's on Friday, while it halted at H$32. That's a 30% difference. STPFT also never dropped very low on Cantor, and was nowhere nearly as low as it was on HSX. PNACT

So Cantor was better on the stocks that went up (LACTZ, STPFT), but HSX was better on the one stock that went down (WILD). Interesting to note that. That was certainly true last week, when Couples Retreat adjusted up strongly, which HSX missed completely (as did I).