Back to my favorite time of the month, options expiration week. Just a recap, as option premiums decline into Friday, I'll be leveraging in-the-money and at-the-money options to trade potential movers. Here's the approach:
1. Identify a momentum stock poised for an explosive move (industry break-out/break-down, earnings, news).
2. Buy calls/puts 1 strike away from the price of the underlying stock.
3. POSITION-SIZE based on your normal risk parameters. If you normally risk $1k, buy $1k worth of calls/puts.
Now that the financials news is out, I'm not sure if we'll see any big moves in this sector. I'll be keeping an eye on ICE/CME as the daily charts look to be consolidating. Tech was weak on Friday so I'll be watching the usual suspects (AAPL, AMZN, BIDU, RIMM, GOOG) to lead the market lower or rebound off support levels.
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