The VIX stair-stepped its way to 25.5 into the close. It could be a big down day tomorrow.
POT - Bought a few puts in the AM as it broke $144.00 for $3.00 profit on puts.
ANR - Tried to bottom-fish but got stopped out of a few shares for $1.00 loss.
Swings:
WM - Stopped out this morning for $0.05 loss on the calls.
ABK - Stopped out this morning for $0.20 loss on the calls but overall it was a profitable trade since I had originally entered in the high 6's.
AMGN - One of the few stocks that actually stayed green today. I sold the puts for $0.50 loss.
STI - Sold this out flat in the AM.
LM - Picked up some puts
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2 comments:
OE:
When do you switch over from Deep in the Money options to one strike out? On OE week or two before? Also, when you go DITM, do you usually go a set number of strikes in the money or a set delta level?
Thanks,
rb
Hey RB, I usually switch over to one strike out the week of options expiration. However, it depends on the volatility of the stock, premiums, target exit and where I can find a reasonable stop level. With the wild swings lately, I've been targeting the intraday dollar-for-dollar movement. For instance, with BIDU, I was trading the Sep 200 Calls so that put me nearly $70 deep-in-the-money at the time of the trade. I'm basically looking for a strike that will cost me the least amount of premium without using up all my buying power. So with the BIDU trade, I think the calls only had a $0.50 premium. On the other hand, I'm looking to enter BUCY when it reverses. It is so oversold that even for a $40+ stock, it could rebound $5-10. In this case, I'll buy 2x the Sep 45 Calls. At the current price, if it gets back up above $50, that would be a nice profit with very limited downside. I'll find time to post a few examples for you.
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