4/15 Day/Swingtrades - FAZ, GS

The markets were weak early in the day but it just felt like there were a lot of buyers stepping in. Pull up the chart for MA. It doesn't get much narrower than that $163 area. I actually tried going short via Puts but was stopped out flat when the beige book numbers were release. In any case, it looks like the bulls still own the tape. In terms of low-risk, high-reward options expiration plays, I didn't see much out there. CME and GOOG had some very nice reversals but I didn't get in on either of them, despite having the charts up all day.

FAZ - This gapped up at the open as I had hoped. However, the opening range didn't hold up so I sold half and moved my stop to break-even which was triggered a while later. I think I eeked out about $0.10 on this trade. FAZ and SKF are dead for awhile.

GS - The chart below looks a bit busy and hence the lack of posts the past couple months...among other reasons. I've been trading these narrow range breakouts quite a bit lately. This is a good example of why I like to trade deep-in-the-mony options. You can wait all day on a $20 stock to see it break-out and move up $1. Or, you can focus on an expensive momentum stock and catch the same set-up multiple times through the day. Deep-in-the-money options allow me to participate in the price movement on a $100+ stock without tying up all my capital. Position-sizing and risk management are crucial regardless of what I trade, DITM options or stock. On the first trade below, I picked up the Apr 110 and 120 calls. The Apr 110 Calls got me almost dollar-for-dollar movement...or $2 in this case. The Apr 120 Calls were out-of-the-money and I only picked up $1 on the calls but on options expiration week, I like to add the OTM calls and use them to my advantage in case the stock takes off on me. On the second trade, I traded the same set-up or break of the narrow range. The market averages and technicals all confirmed the breakout so I pyramided immediately. In this case, I was carrying about 40 Calls. If I was trading the stock, I would have needed to use up almost $500k in capital. The trade-off is that I was giving up $0.15 between the bid/ask spread but overtime, I've learned to accept the slippage as a condition for trading bigger lots. I netted about $1.50 on this trade.