For those of you that have MBA's, the effecient market theory is BS. It was one of the most impractical theories that were forced upon me in grad school. The markets are ruled by fear, greed and psychology. After reading BG's earnings release last night, it was obvious to me that the fundamentals in fertilizers are still intact. There was no reason for yesterday's drop down to $96+ other than getting dragged down by the entire sector and market. In any case, I was happy to see the rebound this morning and even happier that I re-entered at a terrific price. I used the 1-min chart when I saw BG fade back down to $97 to close the opening gap. I entered as the price crossed over the moving averages. I went with my normal position size but if you look at where there was support, I should have doubled down. With that narrow range right at the 2-day support, I had two face cards and the dealer was showing a six. I sold half the calls @ 100.16 for $1.80 profit on the calls. The stop is getting moved back up to $98.90.
BTW, if this looks too good to be true, let me reassure you that the first hour today was agonizing. After last night's research, I was ready to pounce on the early morning strength. Fortunately, the volume was low and the bid/ask was jumping all over the place. I forced myself to sit tight and let things settle down. Also, I rarely place a trade in the 1st 30 minutes due to the volatility and what is known as "amateur hour"...when the market makers are using overnight orders to manipulate price movement. For instance, they will frontload the overnight market buy orders, only to sell into the strength knowing that the stock will move down once the buy orders are all executed. Anyways, I hope some of you were able to pick up some shares/options at these or close to these levels as well.
SHLD - Aug 80 & 85 Calls, leaving stop at $79.50
Again, SHLD held up pretty well. After missing the opportunity to take profits yesterday, I sold half my Aug 80 Calls. Check out the intraday post for details. Now that I've got profits locked in, I'll keep the stop at $79.50 and will look for opportunities to pyramid on strength next week. Hopefully, this one is setting up for a good run.
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2 comments:
OE, my man! Thanks for stopping by. Been checking out some of your options. I'm not that great of an ITM options trader, so this is good.
I wouldn't call myself a day trader. I'm a swing/trend/"wave" trader. However, the past 2 weeks have been great opportunities to day trade... I only day trade when the markets have big reversals or a strong direction or when the Vix has a huge spike, so I probably only dTrade like once a week on average. I also day trade when my swing positions are getting hit, for example, if I have a bunch of longs, and the market tanks then I'll get long a huge load of SKF for a hedge... it usually protects my longs quite well and I don't have to panic-sell.
anyway, those are some of my secrets. hehe. Looking forward to learning from yours!
K, gotta go do some situps... going beach tomorrow. LoL!
-gio
Yo, Gio! Thanks for the tips. I like daytrading on reversal days as well. On other days like today, I tend to get bored and start seeing set-ups that aren't there. I wish every week was expiration week...low premiums and high volatility! Post some pics from the beach. We want to see what we're all missing over here in the mainland.
-OE
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