Options Expiration Trader

5/15 Day/swingtrades

2009-05-15T05:45:00.000-07:00

From this morning: Just a quick update...with the news on TARP money, I'm adding the insurers to the watchlist today. There are quite a few strike prices to choose from...PRU, AFL, MET, HIG, ALL, PFG, LNC.

The market makers pretty much owned the tape today. I didn't see any setups I liked with the insurers and the action on the rest of the watchlist was pretty choppy. I got stopped out of chasing MOS May 50 Calls for $0.40 loss and here's a trade I took late in the day on CME for $1.70:

5/14 Day/swingtrades

2009-05-14T15:45:00.000-07:00

I had a few things to take care of today so only put on some trades in the morning. I actually think today's action bodes well for expiration day. There was a strong push in the morning but most stocks just drifted sideways into the afternoon. Hopefully, we'll get some big moves either way tomorrow. I've got my eyes on the ferts (IPI, POT, MOS), exchanges (CME, ICE...maybe some air will come out of these) and the other usual suspects (GS, AAPL, RIMM, GOOG, WYNN).

ICE - I finally closed out my remaining position as ICE broke through yesterday's high and then retraced back to the moving averages. I only had the May 100's which I sold around $101.50 for $2.60 profit.

GS - This rebounded well after yesterday's weakness. I wanted to enter @ $130 but decided to wait until it cleared the morning spike to $131. I went with the May 130 Calls and sold a bit later as the momentum died down.

5/13 Day/swingtrades

2009-05-13T15:50:00.001-07:00

I was surprised the dip buyers didn't step in to support the close. Could we finally be headed down? A lot of moving averages didn't hold up so be careful if you're long. I'm going back to SKF, FAZ or SRS if the weakness continues.

POT - POT made a nice, sharp move at the open. With the market headed south, I didn't want to be greedy so closed out the position @ $104. I picked up about $2.30 on the calls.

ICE - This continued to pay out today. Despite the market weakness, CME continued its ascent so I figured it was just a matter of time before ICE turned up. I re-entered some more May 95 Calls @ 95.00. Fortunately, ICE took off over the next 10 minutes. With such a sharp spike, I had to take profits. I sold into the strength, closing out all the May 95 Calls and some May 100 Calls. I netted $4 on the remaining May 95 Calls from yesterday, $3.50 on the ones I picked up today and $2 on the May 100's. The May 100 Calls were actually trading @ $0.75 with ICE @ 95.00. Those ran up to $3.70...great return with minimal risk if anyone traded those.

5/12 Day/swingtrades - CME, ICE, RIMM, POT

2009-05-12T13:47:00.000-07:00

Looks like "sell the news" kicked in the past couple days. Today's weakness brought many overbought stocks back to the moving averages. This was needed if you're leaning long and also a very good low-risk entry if you missed the moves the past couple weeks. CME/ICE finally paid out today. I traded those as well as RIMM and POT:

POT - I missed the thrust off $97 so waited for a pullback. I picked up May 100 Calls around $100.

RIMM - I noticed a potential double-bottome around $69. I picked up some May 70 Calls and sold 1/2 for $1 profit around $72. I'm swinging the rest into tomorrow.

ICE - I picked up May 85 and 95 Calls after ICE formed a potential double bottom and bounced off the 10-SMA on the daily. I netted about $3.25 on the May 85 Calls and $2 on the May 95 Calls. At the close, I rolled some profits into May 100 Calls. These only cost $1.10 so if ICE can retest the $104 level, those should pay out nicely.

CME - I picked up the May 250 Calls as CME bounced off the moving averages. This one moved quickly so I closed out at $258, netting $6 on the calls.

May 2009 Options Expiration Week

2009-05-11T11:00:00.000-07:00

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.

New Site: www.OptionsVista.com

2009-05-07T13:37:00.000-07:00

I'll be contributing occasional articles over at this new site...most likely during options expiration week. All the writers are very knowledgeable about options and the trading strategies are very diverse. Check it out when you get a chance: www.OptionsVista.com

OptionSpot - I trade part-time, while striving to develop and refine two different trading styles. The first is discretionary trading based primarily on price patterns. The second method is trading mechanical systems, designed to provide a significant statistical edge in the market. These systems are EOD with a time frame of a few days to several weeks. They are currently and primarily mean reverting strategies and pair/ratio strategies. Price and volatility determine when I use options vs the underlying. My preferred option strategies are selling spreads and buying Deep ITM.

SnapTrader - I am a retail trader trading primarily options. I've been at it for about 10 years, although I've only been very consistent for about the past three years. My option trades tend to be spreads, but aside from that they come in many shapes and sizes.

OETrader - I am a part-time trader focused mainly on momentum stocks. I use deep-in-the-money options to trade high-priced, high-flying stocks. As options expiration nears each month, I transition to at-the-money or out-of-the-money options to maximize the risk/reward of my trade set-ups.

MilkTrader - My full-time job is an airline pilot. As a trader, I've been actively trading option spreads for about 3 years. My trading style is divided into two categories: discretionary and systems. Discretionary trades are done with options where I will express an opinion of market direction or non-direction, and construct an option spread that profits if I'm right, or maybe even I'm slightly wrong. System trades are based on backtesting strategies with specific entries, exits, stop losses, etc. I'm currently doing research on the expectancy of every-month Iron Condors, Trend Breakout systems and non-reversion pairs strategies.

1option - I am a young retail trader with aspirations to manage lots of $$ one day. I am working on a Masters Degree with a focus on Finance. I trade options part-time for income and continue to work on improving my technical skills. My trades of choice include spreads, butterflies, and condors, among others. I prefer to trade indexes and ETFs over indvidual securities.

Landlord - Retired CPA turned Real Estate Investor. Now spending my time trying to make money and work less. My goal is to obtain multiple streams of income. Covered Calls (renting stocks to others) is one of those streams.

4/30 - Day/swingtrades - LVS

2009-04-30T11:50:00.000-07:00

Scanning the charts at the open, I just had a feeling that folks would be selling into the strength. We've been overbought for quite some time and it usually takes one of these gap opens to the upside for the institutions to sell into the strength as the retail trader gets sucked into the last gasp euphoria. Also, a lot of charts were showing double-tops with diverging MACDs. I'm always on the lookout for these on gap open days. Below are a couple obvious examples. Unfortunately, despite the gameplan to fade the strength, I just couldn't get myself to trade the setups with the Dow/Spy positive for most of the day. Time to recharge and clear out the bullish mental blocks in case the weakness carries through over the next few trading sessions.

LVS - Too bad I had sold half the position yesterday but LVS gapped open this morning. As I mentioned above, after the momentum the past few days, I was looking to sell into the strength. I closed out the position @ 8.90. I would normally place a stop at the opening range low but check out the 2nd red hammer bar which took LVS down to $8.40. It reversed so quickly that I didn't even get a chance to place the stop so I decided to switch to the 1-min chart and sold when the stock started fading during the next bar. Also, LVS actually traded up to $9.60 in pre-market but that is the downside of options, you can't unload them during the pre and post-market excitement. No biggy as I picked up over $3 on the 2nd half of the position.

4/25 - 4/29 Day/swingtrades - DNDN, SLAB, WFC, LVS

2009-04-29T16:47:00.000-07:00

After a couple choppy sessions, we finally got some nice trends today. The bears are definitely getting frustrated as every dip is being bought. There is still a lot of cash on the sidelines so until we get a significant catalyst to the downside, I'm going to continue trading the tape to the long side. I got stopped out of a couple setups myself during the chop but here are a couple decent daytrades and updates on my swings:

DNDN - Similar to a surprise earnings announcements that gaps a stock up, creating support/resistance lines, DNDN announce some news on their drug a couple weeks ago. I kept it on the radar and was finally rewarded when the high established on 4/14 was breached. It didn't take very long to move a couple bucks so I took profits and ran. Fortunately, I wasn't around when the stock plunged later in the day.

SLAB - Earnings were pretty positive so I took a position after the stock consolidated and bounced off the moving averages. Another way to trade this stock was to wait until the opening range high, $32.50, was broken. Notice the 2 red bars after the stock first hits $32.50. Lots of traders will use the opening range high to take profits so expect a pullback and consolidation before breaking through. As in most cases, I used the moving averages as my initial stop so did not get shaken out.

WFC - The post-earnings momentum didn't materialize on Monday so I unloaded the calls for $0.50 loss.

LVS - This has held up nicely the past week. I like seeing those white bars on the daily. It finally got close to my initial target around $8.00 so I unloaded half my May 5 calls. I'm going to trail the stop with the other half. Normally, I'd roll some of the profits into the next strike price but the premiums are a bit expensive for the May 7.5 Calls so I'll wait for a pullback and gauge the overall market conditions.

4/22 - 4/24 Day/swingtrades

2009-04-23T06:38:00.000-07:00

I had quite a few daytrades the past few days so I highlighted a few different setups below. The common theme with the setups are low-risk entries where I can comfortably manage the stop (risk).

WFC - This is a post-earnings momentum trade. I like to watch the lows/highs that are printed on the day of earnings. These serve as support/resistance levels for people betting on earnings. WFC built up some resistance around $21 following surprise earnings a couple weeks ago. Now that the profit-taking has cleared out, I think newcomers can push this up a few bucks. I went with the May 20 Calls to give me some cushion in case we get some profit-taking on Monday.

AAPL - This setup involves the RSI and oversold conditions. The key to this setup is to trade with the market momentum and wait for confirmation. In other words, if the market is trading up, and the stock breaks down, I'll trade for a rebound back up along with the market momentum. AAPL broke down a couple days ago, prior to its earnings release. However, the market was still up (at the time, it sold off later in the day). Once the RSI got below 30, I waited for a reversal signal on the candles to catch a low-risk entry. Fortunately, this coincided with the opening range low which usually acts as support.

OIH - This is a "holy grail" bounce off the moving averages. Similar to most of the setups I trade, this allows for a low-risk entry with the moving averages as support. OIH ran hard out of the gates so I didin't feel like chasing it. It finally started pulling back to the moving averages. I don't like the risk of catching a falling knife so I normally wait for some type of reversal signal. In this case, there was a bullish hammer that was confirmed by the following up-candle.

LVS - I picked up some May 5 Calls @ 5.74 a couple days ago as the daily chart was looking pretty bullish on Tuesday's bounce off the moving averages. I added to the calls this morning @ 7.05 and picked up some shares but dumped those ahead of the stress test release. I'm looking to unload or roll the calls to a higher strike price if LVS can get to $8 or gaps open next week.

4/21 Day/swingtrades - FAZ, BAC

2009-04-21T15:25:00.000-07:00

Yesterday's weakness didn't last very long at all. The bulls are determined to keep this uptrend intact.

FAZ - This gapped up at the open but unfortunately, the opening range could not hold. I let go half at the low of the opening range low and closed out the position when the bounce off the moving averages could not hold.

BAC - This settled into a brief narrow range and then printed a hammer off the moving averages. I like this setup because the narrow range allows me to increase the position size while still managing the same risk. I closed out the position for an even $0.50.

4/20 Day/Swingtrades - FAZ

2009-04-20T15:31:00.000-07:00

After the buying spree last week and today's gap open downward, we may drift sideways to down until the stress-test results are released. I wanted to be positioned for any further weakness so I pretty much stayed with FAZ all day. In addition to catching a couple intraday breakouts, I picked up shares on the break of the narrow range early on. After locking in some profits, I moved into May 12.5 Calls which were asking $2.00. That's out-of-the-money and a bit of premium but there's plenty of time before expiration and I want some downside protection in case the setup fails and FAZ gaps down on me. Looking at the 30-min charts, this same pattern played out on Monday - 3/30 but FAZ could not sustain the momentum the following days. The difference today is that there was much more volume.

4/16 - 4/17 Option Expiration Trades

2009-04-17T14:13:00.000-07:00

I caught some good moves the past few days leading up to options expiration. I like this time of the month because the premiums dry up, allowing me to trade expensive, high-flying stocks with minimal capital. Depending on the setup, I can also lever up 2-5x my normal position size. The key is to trade the same set-up as you would any time of the month but to consider increasing your position size with ATM or OTM options. Here are a few setups I took, both moving on earnings momentum:

GOOG - I rarely trade off the 1-min charts but there was a ton of movement in GOOG afterhours yesterday following earnings so I wanted to see how it moved at the open. I picked up the Apr 390 Calls and sold a few minutes later @ $396 for about $5.

ISRG - This has been quite volatile the past few days. I picked up the Apr 120 Calls on the break of $120. I like to trail my stops with the low of the previous candle but after that $5 bar printed, I got out for $5. I was multi-tasking with too many positions and didn't think to add the Apr 125 Calls. The range on the Apr 125 Calls was $0.05 - 7.68 today...amazing if anyone caught the low and dumped at the high.

GOOG - Below is a close-up of GOOG's 5-min chart for today. I picked up some Apr 390 Calls on the break of $393 and sold 15 minutes later for $1.40 on the calls. Again, only on options expiration day can I trade a $400- stock for $3.

4/15 Day/Swingtrades - FAZ, GS

2009-04-15T23:59:00.000-07:00

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.

4/14 Day/swingtrades

2009-04-14T16:25:00.001-07:00

Despite the opening weakness, today's action looked choppy as there are still quite a few dip buyers left from the recent runup. For the past few weeks, any bad news has been bought. Today, GS killed their surprise earnings with an offering priced @ $123 and last month's retail numbers didn't looked too good. So, we may be in for some near-term weakness. If so, it shouldn't surprise anyone as we've had a pretty good runup the past few weeks and need a decent pause/consolidation to digest the gains.

GS - This was definitely on my radar from the opening bell. If you pull up the 5-min chart, GS had a very hard time getting past the 20ma. I actually took 3 trades on GS today but only two are shown on the charts. I entered the first trade on the break of support and opening range low around $121.00. I went with the Apr 125 puts with an initial target of $118 (support established prior to breaking out last Friday) and a second target of $115 to fill last week's gap. I took partial profits @ 119.00 and closed the position when the 1st target was hit @ $118...netting $2.00 on the puts. For the second trade (red candle at 2pm EST), I was actually up $1 on the puts but had cable problems and ended up getting stopped out flat before I could readjust the stop to lock in the profit. Finally, GS broke down again in the last 30 minutes. I picked up the Apr 120 Puts and closed the position when the gap was closed @ $115.20...netting $1.20 on the puts.

C - I used the open strength to close out the rest of this position @ $4.40. With the GS weakness at the open, I figured it was just time before the rest of the financials got dragged down. I don't like to view trades in % gains as I'm more focused on dollar for dollar movements but $0.25 to $1.40 is pretty good...especially if position-sized correctly.

FAZ - Like I said, there were quite a few dip buyers out there today. I first entered FAZ as it broke the opening range high, around $10.10. I tightened the stop to $10.40 which was triggered awhile later. I also got stopped out flat around 2PM EST as I picked up FAZ shares along with the GS puts above. Finally, I re-entered at the close as volume picked up and the financials weakened into the close. This is a speculative ONH (ala Stewie) play as overnight holds in FAZ have NOT been rewarded the past few weeks. However, FAZ is finally trading above the moving averages on most timeframes and the Calls should give me some downside cushion if the setup fails tomorrow.

4/13 Day/swingtrades

2009-04-13T20:51:00.000-07:00

I haven't posted much as I've been in daytrading mode the past couple months and there have been too many charts to put up. It looks like we've been in a nice uptrend lately. It appears we may be overbought but I'll keep riding the trend until it ends.

I've been mainly trading the financials stocks. The 5 & 15-min charts have been helpful to reduce some of the "noise" as the Vix has now come down below 40. The low-priced issues like BAC/C/FAS have also been great for leverage using options. I've found some nice narrow-range breakouts that have allowed me to position-size 2-5x my normal lot size. Here are a couple trades I took:

C - The daily has been consolidating nicely. The Apr 3 Calls I picked up on Friday cost $0.25...dirt cheap. I took some off the table near the close.

FSLR - This carved out a nice narrow range. I initially entered @ 143.00, got stopped out and re-entered @ 143.50. I also bought the Apr 150 Calls as FSLR popped to $157 last time it broke out. I managed $4 on the Apr 120 Calls and $0.75 on the Apr 150 Calls.

2/20 Daytrades

2009-02-20T15:23:00.000-08:00

I wanted to try and post real-time today but the action was just too fast and furious. Expiration day continues to be my favorite day of the month to trade. Premiums dry up so you can trade the big movers with limited risk and potential for big gains. Many traders take options expiration day off due to the volatility. If you're a daytrader, that makes no sense, especially with options where you can control your risk.

Today, you can just sense the fear in the market. BAC/C were getting whacked. I went with the weakness early on and then bet against it as the panic-selling built up.

SKF - This was a big winner for me back in November and again today. My first attempt @ 204+ was stopped out. After peaking above $210, I went back into the Feb 200 Puts which were only trading $1.oo at the time. As I've mentioned previously, the key on expiration day is to continue position-sizing as usual. If you normally risk $1000, then risk the same. In today's case, with the dried up premium, you'll probably be able to pick up twice the normal position for the same amount of risk. In my case, I had 3x the amount of calls at $208+ than I had at $204. The market averages started strengthening, RSI/MACD declining and a narrow range developed for risk-control. I took partial profits at $196 for $6.00 profit. The oversold bounce got me emotional so I set a limit order for $10.00 to close out the position at around $190 for $9.00 profit. The range for these puts were $0.45 - $18.20 so I definitely left a lot on the table but am still happy with the profits which easily offset the hit I took with the UYG Calls.

FAZ - I traded the market weakness with FAZ early on. A narrow range developed and I entered @ 78.50 on the break of the range. I took profits at $81.00 when the RSI indicated overbought conditions. I highlighted the same exact set-up later on in the day. I was too distracted to trade this but the set-up is the same....break of a narrow range in the direction of the market momentum. The narrow-range allows me to easily define a stop point.

GS - Here's a trade I mentioned on a chatboard that I chickened out on. During the panic selling midday, I noticed the potential double-bottom on GS. RSI and MACD were both diverging. The GS Feb 80 Calls were trading $0.95. With a stop at $79.00, the true risk was proabably only $0.50. That would have been nice for $5.00...

2/11 - 2/19 Day/swingtrades

2009-02-19T18:36:00.000-08:00

Anyone want to buy a few hundred UYG Feb 3 Calls?! Barring some overnight BS like back in October, I'll be left holding the bag on those calls as they expire tomorrow. Alas, I had high hopes for a market rebound but the trend is still down. My only consolation is that I capped my loss with the Calls vs. the stock. Looks like this market will continuing drifting lower. The problem with all these attempts by our government to stabilize the markets is that the window of opportunity has come and gone. The market won't rebound until we start to see the economy stabilize which won't happen for at least another 6 months. In the mean time, no one wants to put their money to work. Every day the market drifts lower, middle America will continue moving to cash. It will take a significant intervention for those same folks to think, "We'll be okay. After losing over 50% of my account last year, I think stocks are the best investment now...". Fogettaboutit!!!

I've been in daytrade mode the past week. FAZ has been the vehicle of choice with a few trades in POT. I've included the POT trades but the FAZ trades are too many and the chart would look pretty messy:

POT - I started yesterday with POT Feb 60 Calls as it broke the opening range. I took partial profits on the first spike and closed the position on the second spike when the momentum tapered off into the close. However, I decided to go with OTM Feb 85 Calls for an overnight which didn't gain that much despite the gap open due to the high premium on the calls. Later today, I picked up puts when the market traded lower and POT could not hold the 84.00 support level.

AZO - How the heck is this pushing a 52-week high? I guess Eddie Lampert is doing something right. Actually, autoparts generally do good during recessions as everyone would rather save money and fix up their clunker than splurge on a new hot rod. I would not look to short this new leader here. Any short-covering rally and this will be the first to sky rocket.

ESI - This was the options expiration play of the day. I wish I took this trade. The Feb 120 Puts traded in a range of $1.00-15.10. I'll be looking for these types of moves tomorrow if the market falls apart or has a huge rebound.

2/10 Day/swingtrades

2009-02-10T23:21:00.000-08:00

I came into the day expecting "sell the news" but I didn't think we'd go that far down. There was basically too much anticipation for Geitner's plan. The only thing I got out of his speech was that he needs practice using teleprompters and not making it so obvious. How about that follow-up interview, why can't he look the interviewer straight in the eyes instead of tilting his head and eye-balling him? If he is going to play a big role in the new administration's economic recovery plan, he better step up his game a few notches.

As for the markets, I actually think it was more of a trader's sell-off. Basically, we've moved quite a bit since last week so there really wasn't too much of a base to hold onto. At least that's my thinking since I'm left holding the bag on those UYG calls. I'm going to stay nimble the next few days and go back to daytrading mode...long or short, wherever the markets take me.

USO - This is still trading pretty sloppily. I moved my stop up on that gap open and it triggered a bit later for $0.20 slippage on the calls.

OIH - I got stopped out of this one as well for $0.30 on the puts. Looks like yesterday's double-top was definitely the time to sell.

2/9 Day/swingtrades

2009-02-09T16:57:00.000-08:00

POT - Another strong move at the open. POT started weakening midday so I unloaded the remaining Feb 95 Calls around $94.15 as the RSI/MACD were declining and the second attempt at $95 failed. Too bad I did not flip to puts at the same time...that would have been a great follow-up trade. POT has made a monster move the past week and was definitely due for a breather.

OIH - This was also looking pretty good this morning. Unfortunately, I forgot to pull up the daily and check for potential resistance levels.

I ended up exiting the calls after giving up about $3.50 on the stock and re-entering later in the day. We'll see tomorrow morning if that was a wise decision.

BAC - B of A showed some nice strength at the open. However, it was sitting right at the 20-SMA which acted as resistance for most of the day.

I tried pyramiding @ $6.91 as the moving averages inched up but was later stopped out of Friday's and today's position @ 6.84. This one probably needs a breather.

USO - The action on this is boring but better than losing money. I'm still holding.

UYG - Still holding. I'll either unload or add more pending tomorrow's reaction to Geitner's plan.

2/6 Day/swingtrades

2009-02-07T11:14:00.000-08:00

BAC - This one has made an impressive move off the lows from Thursday. My entry was late as BAC broke out of its morning narrow range. The key to this setup is the position size. If my entry was in the $5.70 area, I could have position-sized for $0.20 risk. Instead, I ended up position sizing for $0.45 risk which was still decent but not great. With the Dow up over 200, I got a little greedy in the afternoon and instead of selling at $6.40, I ended up unloading half @ 6.20. I'm still carrying half the position.

POT - I picked up some shares for a daytrade as POT broke out of the declining channel. I set a $0.50 trailing stop that triggered awhile later @ 91.75.

SWINGS

POT - I'm glad to see the strongest daily chart I put up on Thursday was the strongest mover of my holdings. I used the opening strength to unload half my position. Later in the day, POT stalled at that $92 level so I closed out the Feb 90 Calls. I picked up about $3.50 on the Feb 90 Calls and $2.50 on the Feb 95 Calls. I'm still hold half of the Feb 95 Calls from Thursday.

OIH - This held up pretty well and started rallying midway through the trading day...still holding.

USO - This was definitely the laggard for the 1st half of Friday. Then, there was that sudden spike above $29 before settling back at $28+. I'm still holding.

UYG - Feb 3 Calls are looking good. Volume/open interest picked up on Friday so the premium has edged up a little.

2/5 Day/swingtrades

2009-02-05T15:03:00.000-08:00

I was definitely trigger-shy today. An hour into the trading session with the Dow down 110 points, I looked at my trading screen and most of my watchlist stocks were green...divergence. I then thought that Thursdays have usually been turnaround days these past few months...experience. Well, the markets reversed and did so quickly. I had an opportunity to pick up GS and POT before the breakout but my limit orders worked against me...mistake. I ended up trying to chase AAPL late in the day as it consolidated in the $96.50 area but got stopped out a little while later for $0.40 loss. I did decide to swing some out-of-the-money calls on the energy sector late in the day. Check out the charts. It's been a month since I had this many overnight holds so we'll see if there is any bullish follow-through tomorrow.

POT - This looks to be finally breaking out of the most recent channel. MACD/RSI/OBV are all rising. If we can get some cooperation from the overall markets and economic news, this one has plenty of room to run. I went with Feb 90 & 95 Calls.

OIH - This chart is not as strong in terms of all the indicators lining up. However, I like the volume the past 2 days. For this, I went with Feb 85 Calls.

USO - Definitely the weakest of the charts, I'm hoping that I end up catching USO at the bottom of the channel. 28 appears to be decent support. I picked up Feb 25 Calls.

UYG - I was a bit nervous this morning as I watched UYG drop to $2.85. This was below my intended stop level but the Feb 3 Calls were still carrying $0.35 premium. I normally would let myself get stopped out and re-enter but I'm carrying a large position and the $0.05 bid/ask is a decent amount of slippage. I was losing $0.05 for every $0.15 drop in the stock so decided to give myself a bit more room. Luckily, it rebounded and I'm still carrying the position.

2/4 Daytrades

2009-02-04T14:25:00.000-08:00

FAZ - I picked up shares as FAZ broke above the moving averages which also coincided with the Dow going negative. Stop was placed at 48.80. I took partial profits near the top of the first spike which coincided with a fib retracement. I closed out the position later on as the RSI showed overbought conditions. I should have used the MAs to trail my stop, which would have kept me in the trade for that explosive move to $54+, but the conditions were a bit too choppy today.

GS - As the market averages continued to weaken, I picked up some GS Feb 110 Puts as it broke below of the narrow range/support area around 88.00. I took partial profits @ 86.11 as the RSI indicated oversold conditions. I was later stopped out of the remaining position as GS rebounded late in the day.

1/27 - 2/2 Day/swingtrades

2009-02-03T00:44:00.001-08:00

Below, I highlighted a few daytrades that I took over the past week. I'm also carrying a position in UYG Feb 3 Calls. I started buying last Wednesday as the market rallied. This is a speculative trade on the assumption that the new President will not let the markets fall much further. Based on the holdings within UYG, I think the downside is limited at this point. I'll close the position if UYG dips below 2.95.

AAPL (1/28) - As I've highlighted before, I like using the opening-range high/low for entries/exits. These points indicate pre-open support/resistance levels that play out through the remainder of the day. AAPL gapped open and consolidated for about an hour. I entered shortly after the break of the opening range high with Feb 70 Calls. I almost sold out on the first dip below the 20-SMA (93.5) but held based on the market strength. I later exited at the highs of the day on the double-top. The declining RSI and MACD clued me in that the 2nd attempt at 95.00 would not hold.

FAZ (1/30) - I didn't see too many good setups last Friday. So, I waited around for FAZ to consolidate around the moving averages to give me a reasonable stop placement. I had a buy-stop trigger above 50.50. I sold a little while later towards the close when the doji developed on the 5-min chart.

FAZ (2/2) - I've highlighted this setup before...FAZ crossed the moving averages and retested them for support. I entered as it bounced off the MAs and quickly pyramid, using the 20-SMA as a stop. I sold half as FAZ printed 2 red bars and bounced off the 10-EMA. The markets were choppy and I wanted to walk away with some profit. With that out of the way, I set the stop at 52.00 for the remaining half and closed out the position when it hit $2.00 profit on the initial entry.

1/26 Daytrade

2009-01-26T17:34:00.000-08:00

I was a John Thain hater until I saw the CNBC interview. Here's a recap:

http://news.yahoo.com/s/ap/20090126/ap_on_bi_ge/bank_of_america_thain_1

He was actually very honest and straightforward with his answers. The $1.2MM for the remodel is still bad judgement but it looks like Ken Lewis was out looking for a scapegoat. He definitely needs one after his blunder with acquiring Countrywide and then jumping the gun with Merrill.

BTW, anyone see this ugly incident over the weekend?

http://rivals.yahoo.com/ncaa/basketball/blog/the_dagger/post/Please-note-that-Chase-Budinger-s-face-is-not-a-?urn=ncaab,136602

I guess it's easy to get away with this type of behavior when the coach endorses it by saying the referees misinterpreted the incident. Aubrey Coleman issued an apology today through the athletic department but it was just a PR move by the school. I can't see the guy feeling bad about the incident when the video shows him high-fiving his teammate and laughing as he his leaving the court. Someone said it best, even the UFC, involved in full-contact mixed martial arts, does not allow kick or knees to the head when a fighter is down. With the NCAA, it will only cost you a 1-game suspension.

Anyways, back to trading...

FAZ - I scanned some charts while waiting for my delayed flight this morning. I saw a narrow range develop in FAZ and entered when it broke out as the markets gave up the morning gains. I took partial profits at $61 and closed out the rest of the position as I was boarding the plane. I couldn't exit at the top but am more than happy with a $5 move in less than an hour.

1/23 Daytrades

2009-01-23T20:14:00.000-08:00

The bulls did a pretty good job of buying the dip at the open. I'm not sure where we head from here but if I'd have to guess, I'd say we move a bit higher through earnings if they continue to be relatively decent.

POT - I got started a bit late today and didn't see any setups I like. Trader Sloth mentioned the strength in the ferts (POT, CF, MOS) so I kept them on the radar. The only one that setup a very nice narrow range was POT. Defining a stop placement was easy and once the market started rebounding, I picked up some shares on the breakout. I sold half for $2.00 profit and using the 5-SMA and 5-min bars to trail my stop, I got triggered a bit later as the rally faded.

1/21 Daytrades

2009-01-21T21:47:00.000-08:00

I watched a bit of the Geitner testimony today. My favorite Senator is Jim Bunning of Kentucky. This guy pulls no punches and tells it as it is. He ripped into Paulson and did the same to Geitner today. He also didn't back down from the Chairman of the Finance Committee when the Chairman told Bunning he had plenty of time to review the confirmation materials.

http://www.upi.com/Top_News/2009/01/21/Sen_Bunning_grills_Geithner_on_taxes/UPI-50441232567176/

Another comment I liked from one of the other Senators was that since Geitner got a "pass" for this tax situation, he should order the IRS, when he's confirmed, to give the rest of the country a "holiday" on taxes to be fair. I like the new President's quick moves to clean up the oval office with caps on salaries and tight restrictions on staff dealings with lobbyists. However, his nomination of Geitner is too close to the old Boy's club. Geitner played a role in all of Paulson's decisions and we all know how that turned out. BTW, the worst decision in 2008 was Paulson letting Lehman go under. He wanted to protect his buddies at Goldman and JP Morgan who had $50-100 billion in counter-party risk. Instead, the rest of the country paid in Trillions as the markets lost all confidence in the capital markets and everyone feared that the government may let anyone go under.

Alright, enough politics. The markets continue to be the daytrader's dream. The wild swings are fun to watch and agonizing to trade if you are not on the right side.

SKF - I continue to stay with SKF. I used the same set-up as Friday. With the markets up and yesterday's huge down-day, I watched and waited with the 15-min charts for a trend reversal. SKF traded below the moving averages and rebounded to test the moving averages. Once the test failed, I shorted @ 183.50 using the 20-SMA as a stop point.

I switched to the 5-min charts for entry. SKF dipped to 173 and rebounded back to 176 so I placed a buy order (to cover) @ 173.50 which triggered a bit later for an even $10 profit. As you can see, sometimes you win and still feel like you lost. Had I continued to manage my stop using the moving averages, I could have picked up another $20+ on this trade...oh well.

GS - As the Dow rallied 100+ and held, I entered GS as it broke the narrow range above $65. I used the 20-sma as a stop and managed this trade with a lot more patience. I sold half for $2+ profit and closed the position on the other half towards the close. Similar to the SKF trade, this set-up was all about probability (break of a narrow range and/or break of the moving averages) and managing risk using the moving averages.

1/16-1/20 Daytrades

2009-01-20T21:49:00.000-08:00

Wow, what a bloodbath in the markets. It definitely didn't look good for the bulls when the markets barely flinched during the inauguration. The street appears to be pinning a lot of hope on Obama to make something happen. If he can't work any miracles, we're going to break those 2008 lows.

I've been mainly focused on the inverse ultrashorts. These are like a combination of the VIX and a particular sector. In the case of the financials, we get both the weak sector and the fear factor playing out in SKF and FAZ. These are good short-term trading vehicles on the way up AND on the way down. Make sure you're on the right side...! :)

SKF - I didn't do much on expiration day. Fading the gap at the open would have been great but I was too groggy at the time. I stuck with SKF hoping for some wild swings throughout the day. I picked up some Jan 160 Puts as SKF broke below the moving averages and ran back up but couldn't break through the 162 level with conviction. I sold after a few bars for a couple bucks on the Puts. A bit later, as all the premium dried up, I picked up Jan 165, 150 and 145 puts as SKF broke through support around $156. I picked up $4+ on the Jan 165 puts. The jan 150 Puts were up over $1 but I had to sell at breakeven as SKF rallied back to 20-SMA. I let the 145 Puts expire for $0.30 loss.

SKF - After the huge gap open today, there was no reason to chase the stock. I waited for consolidation around the moving averages where I was comfortable with a stop placement. I entered a bit after midday at 180.50 with a stop below the 20-SMA which was never violated. I had a sell order that triggered for an even $10 gain.

1/15 Trades

2009-01-15T11:44:00.000-08:00

Found some time to place a couple trades. This strong rebound off the lows is a great opportunity to leverage options into expiration tomorrow. I'm focused on the beaten-down high fliers:

CME - Bought Jan 170 Calls
GOOG - Bought Jan 310 Calls

UPDATE - Caught the rally too late...stopped out even on both. Hopefully the volatile swings continue tomorrow. At-the-money options are going to get even cheaper.

1/6 - 1/12 Trades

2009-01-12T20:29:00.000-08:00

After initiating those positions last week, I got busy at work and also caught a cold while traveling. I'm slowly getting over the cold now and hope to put on a few trades for this week's expiration.

BUCY - I used the opening strength on 1/6 to unload half the position. I was stopped out the next day as the rest of the market started the recent sell-off.

BUCY - I had a target of 23 for this one which was the last high in mid December. I used the opening strength 1/6 to unload the position. I normally would have held half but I had a pretty decent position and just wanted to lock in the gain on this one.

SRS - I got stopped out at $51 and have not re-entered. I'll probably focus more on SKF as SRS has been very choppy lately with rumors of government help in the commercial real estate sector.

LVS - I managed a $1 profit on half of this one on 1/6 as well. The rest was stopped out at break-even last week.

Kicking off 2009

2009-01-05T16:42:00.000-08:00

Hope the holidays were terrific for everyone! I traded lightly and caught a few good moves here and there but also executed horribly on a few good setups. We've moved upward quite a bit over the past week and are probably due for a slight breather. I'm near-term bullish given all the bullish technical charts and cash that has been sitting on the sidelines the past couple months. Poor earnings will probably be the next catalyst that takes us back down. I'll be managing my trades as swing positions as the work/travel schedule beckons for the next couple of weeks.

OIH - I scanned a bunch of charts last week and they all looked like OIH below....bouncing off support, narrowing moving averages, rising MACD/RSI/OBV. I picked up Jan 75 Calls to give myself some cushion in case the low-volume moves were sold off in January. At least that was the plan. Instead, I woke up on Dec 30th, switched to the 15-min charts to manage my stop and was stopped out at the low of the day. I profitted on the trade but that was 12+ points ago.

BTU - After the OIH debacle, I didn't want to chase the moves so I pulled up some beaten down names that could participate in the second leg of a rally. I picked up BTU Jan 22.5 Calls around $24.50.

BUCY - I picked up Jan 20 Calls around $20.00.

LVS - I picked up Jan 7.50 Calls around $6.90.

SRS - I also picked up SRS around 52.50. It is forming a potential double-bottom around $50.00 and I like the strength it exhibited during last Friday's rally.

2008 HAPPY HOLIDAYS!

2008-12-24T13:45:00.000-08:00

Just wanted to say Happy Holidays to everyone! Thanks for stopping by the blog this past year. The markets have generated a ton of oppotunities this year and hopefully you've made some money or at least learned some things along the way. If not, the new year is upon us so don't let any past mistakes bog you down. One of the worst things you can do in trading is dwell on a bad trade or missed opportunity. Learn from it and ensure that you don't repeat it.

If the past two days are any indication of the trading set-ups available until January 5, I'd rather sleep in and spend time with family and friends. Enjoy the holidays, stay warm and get some rest for the new year!

12/22 Daytrades

2008-12-22T15:55:00.000-08:00

While I generally don't trust these low volume days for swings, the moves tend to be exaggerated which is good for daytrading. I started out using 5-min charts but switched to 15-min charts for entries and back to 5-min charts for exits.

SKF - I used the 113 level established early in the morning for entry and just trailed the stop using the moving averages and 5-min bars. I commented in one of the chat boards that the last hour is too volatile for the inverse ETFs and sure enough it was. I'm glad I exited a bit early.

SRS - I started the day on 5-min charts but got a false break-out early on.

I then switched to the 15-min chart and waited until it line up and crossed the moving averages before re-entering. Again, the last hour was a crazy so I'm glad to have exited a bit early.

GOOG - This was a slow mover but set up a very nice inverse holy grail off the moving averages. I liked the fact that there was a very narrow range to determine a stop level. I went with Jan 380 puts and managed about 5 points later in the day.

12/19 Daytrades

2008-12-19T06:57:00.000-08:00

6:55AM - Bought some RIMM Dec 40's @ 1.20, bouncing off 5-SMA

7:30AM - Stopped out for $0.20 gain

8:00AM - Bought some SKF Dec 100 Calls @ 8.39, stop @ 107.00

9:05AM - Taking profits, sold SKF Calls @ 12.00

12:10PM - Bought SKF Dec 105 Calls @ 6.90

12:25PM - Stopped out of SKF @ 6.00

12/12 - 12/18 Day/Swingtrades...none

2008-12-18T22:12:00.000-08:00

I've been on the road all week and haven't been trading. I dumped half my POT puts last Friday at the open for a double. I held the other half for a few more hours but POT was just too strong as the market climbed back so I closed out the 2nd half at break-even.

I'll try to post real-time trades tomorrow if I see any decent set-ups. As with other options expiration days, I'll be using at-the-money options on the usual, volatile suspects to take advantage of the minimal premiums.

12/9-12/11 Day/swingtrades

2008-12-12T00:20:00.000-08:00

C - I sold the remaining shares @ 8.45 as C and the financials started to act week yesterday amongst the market strength

PCX - After seeing this break9.00+ a few times, I decided to close the position this morning for $0.75 on the Dec 7.5 Calls as the momentum appeared to be fading.

POT - I shorted this yesterday at 68.80 as it formed a double-top and took profits at 67.00.

POT actually printed a reversal hammer as it bounced off the 20-SMA on the 15-min charts.

POT - This has moved quite a bit from the low 50's last week. However, the 20-SMA still shows a downward trend. I took a low-risk short position with Dec 65 Puts yesterday around $69+ and added some more above $70 today. I'm going to take partial profits if it trades back down to $60 and trail the rest in case it retests the recent bottom in the low 50's.

12/8 Day/Swingtrades

2008-12-08T17:17:00.000-08:00

In contrast to Friday, I didn't feel like chasing stocks after the opening gap. I went searching for low-risk stocks setting up a base. I picked up some BIDU mid-morning and got stopped out awhile later for $1 loss.

C - this set up a nice narrow range as the market consolidated the opening gap. I liken this to doubling down on blackjack. The narrow range allows me to increase the position size while maintaining the same risk. I sold half as the market began to stall out and carried the other half overnight.

PCX - Coal stocks performed very well today so I picked up some Dec 7.5 Calls as it appears PCX may be coming off a double-bottom.

12/4-12/5 Day/Swingtrades

2008-12-07T00:13:00.000-08:00

I was hoping to get in on some short positions on Thursday ahead of the jobs report but got stopped out of SKF a couple times for $1 loss each and couldn't find a comfortable entry on the late day spike. I ended up in cash going into Friday.

On Friday, the early morning dip lost steam and it just feels like the bears are exhausted at this point. As the market decline stalled out, there were a lot of decent setups for long entries. I caught a decent move in AAPL and picked up a couple bucks in BIDU.

Next week will probably be similar to the past month with a long-bias. In this environment, technicals and fundamentals don't carry too much weight. I'll stay nimble and take profits quickly. If we get a rebound in energy, it may be good for a couple days as the sector has been obliterated. Check out the metals (X, NUE, etc.), many are starting to cross above the moving averages. On the financial front, C held has held up very well since bottoming a couple weeks ago so I'll be looking to go long again above $8.20+. JPM and WFC also look like decent long candidates.

In the long run, I think this is still just a bear rally. The fundamentals of the economy are still horrible and I haven't heard any plans that may pose a decent solution to the economic mess. If/when we turn back down, the inverse ETFs are still the way to go.

C - Thursday, I used the morning strength to unload my remaining C Dec 7.5 Calls. I made some decent coin on the first run-up to $8.40 from $6.80 but C hasn't moved much since and I didn't want too much exposure ahead of the job numbers. I'm going to use $8.20 as the next re-entry level if this rally has more momentum to it. C actually held up pretty well the past 3 days.

AAPL - I mentioned in one of the chat rooms that SKF/SRS did not look very strong when the Dow was down 200+points on Friday morning. I didn't want to chase any shorts so decided to look for low-risk long set-ups. AAPL based pretty well at the 89-90 level so I picked up Dec 60 Calls as AAPL crossed above the moving averages. I sold out aorund $92.50 as it stalled and re-entered a short while later to pick up another point. All told, a bit over $3+ on the calls.

BIDU - this was the same set-up as with AAPL above. I did a quick scan for stocks setting up a base with an easy stop-level. I picked up BIDU shares as the market started to rebound and closed it out a bit later for $2.00 profit. This normally would have been more but BIDU has been clobbered lately so I guess buyers weren't too eager to jump back in on this one.

12/3 Day/Swingtrades

2008-12-04T00:48:00.000-08:00

Just a quick note, I'm still swinging those C calls. I've been too busy this week to monitor the markets so I'm going to put in a trailing stop in the AM. I'm going look for a decent setup to go short via some puts tomorrow ahead of the employment numbers on Friday.

12/2 Day/Swingtrades

2008-12-02T21:43:00.000-08:00

These wild days are becoming the norm as the market is having trouble shaking off the selling pressure. The fundamentals are still horrible so keep those trades on a short leash.

No trades for me today as I was busy with work. I'm still carrying those C Dec 7.5 Calls. Looking at the intraday charts, the inverse ETFs are still providing some great daytrading set-ups. Easy with hindsight but I've highlighted some very low-risk spots that caught my eye using narrow ranges and moving averages:

12/1 Day/Swingtrades

2008-12-01T07:06:00.001-08:00

That last hour of the trading day continues to be a daytrader's dream if you're positioned correctly.

FNM - With the market weakness, I unloaded all the FNM I had bought last week @ 1.19 when the stock closed the opening gap.

C - I wasn't as fortunate with C as it traded down from the opening bell. I'm fighting the tape here a bit as I'm still holding on. It's all time premium on the Dec 7.5 Calls so I don't expect them to go to zero anytime soon. I'll unload on the next rally.

SRS/GS - My timing was off today. I picked up SRS a bit too early @ 142.00 and was stopped out for $0.70 loss as the market tried to rally. I then switched over to GS only to get stopped out for $0.50 loss as the market cratered. I should have re-entered as the set-up on SRS looked even better but I had to head out to a meeting.

Charts - Energy/Energy Services

2008-11-30T23:04:00.000-08:00

Gas finally broke below the $2 mark in my area! I've got a 30-gallon guzzler so it's nice to see sub-$60 fill-ups. That said, the charts in the energy and energy services sectors are starting to show some strength. I hope oil keeps falling apart but I'll be keeping an eye on the following stocks if they continue to rebound:

11/28 Day/Swingtrades

2008-11-28T06:39:00.000-08:00

Another low volume run-up for the bulls. I should have slept in but decided to wake up just to babysit my positions. My swing positions closed the day pretty well. With these low-volume gains, I won't be surprised to see a gap open on Monday if the institutions try to suck in the longs. I'll use that opportunity to close out these positions if it starts to fade. Many stocks are closing at the 20-SMA on the daily so we may need a rest to consolidate the gains this past week. Time to go hunting for holiday bargains!

C - I'm glad I went with C instead of UYG the other day. C tacked on some more nice gains. I sold some of the Nov 7.5 Calls for a double on the options.

FNM - This baby just keeps chugging along. I normally don't think in percentage gains but with penny stocks like FNM, I'm taking large, concentrated bets based on a % of my portfolio so I have to view my return based on the initial capital traded. FNM has gained over 300% (from $0.31) since last Friday and when it hit 100% for me this AM, I took some off the table @ 0.95. Just as a reminder, I also have a smaller longer-term position that I started a month ago (yeah, too soon) with an average cost of $1.20. I stopped adding to that position when FNM broke below $1.00. Fortunately, with the size I purchased on Monday, I'm well in the black overall. The key for me was not to let the past position hold me back from trading the set-up I saw on Tuesday.

11/26 Day/swingtrades

2008-11-26T10:17:00.001-08:00

Another nice day for the bulls. Despite the low volume and volatility, I tend to like these days. If you're on the right side of the trade, you can catch some pretty decent moves. The key is not to make any predictions and just go with the trend. Otherwise, the whipsaw action can be frustrating. Have a safe and happy Thanksgiving!

C - After the pounding the past couple weeks, C showed some decent strength during the early morning weakness. I picked up shares around 6.80 and rolled the position to Dec 7.50 calls when it reached 7.20.

POT - I got a late start on POT but picked up some shares as energy/basic materials started showing strength. I closed the position as it formed a potential double-top on the 5-min chart.

RIMM - After yesterday's weakness, RIMM showed some strength this morning. I wish I had held yesterday's position but didn't want to sit on the sidelines and reminisce. I opened up a position as it broke the 42.50 area and sold half after some decent gains and closed the position as the markets started to fade around 10AM. Luckily, this turned out to be the top of the day.

FNM - this got a nice little boost in the AM. I bought yesterday @ $0.50 and pyramid more shares @ $0.70.

11/25 Day/Swingtrades

2008-11-25T06:58:00.000-08:00

That was a very choppy session. However, it was not surprising given the run-up the past few days. As I mentioned yesterday, I was looking to exit positions on any opening strength and the 1st hour played out perfectly. After that, I couldn't find many decent set-ups throughout the day.

UYG - I closed out the position once the early morning strength began to fade. It is still trading above the 5, 15 and 30-min moving averages so I'll keep it on the radar in case we continue to rally.

RIMM - The chart is an intraday close-up with 5-min bars. RIMM was weak from the open but found some solid support as it based around 40.50-41.00. I took a low-risk entry at 41.11 once it traded back above the moving averages and sold at 41.60 late in the day...pocket change.

CME - I didn't like the way the market was holding the gap open so I closed out yesterday's CME position when it couldn't break through $212+ on the second try. $22.00 profit.

FNM - I also picked up some FNM. The daily shows a potential double-bottom.

11/24 Day/Swingtrades

2008-11-24T20:30:00.000-08:00

What goes down must come up...I guess. That was another monster rally today. You could sense the shorts were panicking. Too bad it is the start of a new month. All the option premiums are sky-high. I knew SRS/SKF were going down hard but stayed away from them because I didn't want to tie up too much capital shorting them. Puts were just out of the question given the premiums. We've now bounced over 1000 points on the Dow from Friday's lows. I'll play a momentum push at the open and will probably go back to cash to let things settle down. This is a low-volume week and anything can happen...especially Friday.

In addition to the trades below, I got stopped out of OIH a couple times for $0.40 loss each time. The chart and my entry/exits are boring so I'm not posting it.

ICE - This definitely got away from me. ICE tends to rebound hard on market rallies. I thought I got a decent/early entry @ 61.19. ICE rallied to 63.00 (the opening range high, that's why I tend to use this level on early morning rallies) and fell back. I moved my $1.00 stop up too soon and was taken out for $0.19 loss. I was too busy to re-enter later on.

CME - Again, similar to ICE, CME tends to move big on the rebounds. This was a much riskier trade so my position-size was 25% of the norm. The best entry would have been around 174 but I was late and just banking on momenutum, ready to bail if the 5-min bar low could not hold. I picked up shares @ 188 and held them all day and finally got the push into the close.

UYG - With the strength in financials, I had to get in on UYG. The tight, narrow range at the open was easy to determine a stop level. I picked up shares @ $4.55 and sold half at the close when I noticed GS and other financials start to fade.

MS - I picked up some shares as the opening range high was taken out around $11.50. There was a nice narrow range (less than $0.50) so I was able to position-size accordingly. I took partial profits to lock in $1.00 and sold the rest as a double-top formed around $13.50 prior to the close.

11/19 - 11/21 Day/swingtrades

2008-11-21T20:56:00.000-08:00

Wow, the last 2 hours of today were amazing! Options expiration, market rallying, inverse ETFs overbought...what more can you ask for. I felt like I missed some great opportunities the past couple weeks due to work. I'd pull up the charts in between meetings and late at night to see the amazing intraday volatility. I resigned to just sitting on the sidelines and not chasing anything the past few days. Well, after sitting on the sidelines since Tuesday morning, I finally got a reprieve as a late scheduled meeting concluded early. That left me with 1.5 hours before the market closed and plenty of time to get to the airport...and place a few trades along the way.

SKF - I did a quick scan of a few charts and noticed a potential double-top on SKF and SRS. I picked up some SKF Nov 280 Puts for $2.00 with the stock at $295. I placed an order to sell at the market at the close and headed for the airport. 30 minutes later I stopped off for lunch and checked the quotes to see SKF @ $270. Unfortunately, I checked my sell order and it was cancelled by the broker (something about a market sell at the close on options on expiration day, I'll check Monday). So, I placed a limit sell @ $12.00 and it was triggered 5 minutes later for $10.00 profit. Well, I took my laptop to lunch and decided the Nov 260 were looking waaaaay too cheap @ $0.70 and with the market rallying/short covering. So, on the SKF bounce back above $270, I plowed some profits back into the Nov 260 Puts @ $0.70. I dumped those 10 minutes later for another $10.00 profit. It would have been nice to hold everything right into the close but I haven't been able to keep up with the intraday market action so my trading emotions have been out-of-sync for a couple weeks.

RIMM - I dumped the rest of my options for $3.00 profit on Tuesday morning. The market was down close to 100 points as RIMM rallied to $48+ so I moved up my stop and luckily, it triggered near the highs of the day before the market fell apart.

11/8 - 11/18 Day/swingtrades

2008-11-16T10:57:00.000-08:00

I've had a very hard time trading part-time last week and this week. It was pretty much impossible to trade on any time frame other than 1 and 5-min charts. I did catch a little bit of the bounce on Thursday afternoon and went back to cash on Friday morning. The only set-up that works for my current schedule is catching the lows/highs of a channel. I need to be in a position to let a daytrade turn to a swingtrade if I have to leave the monitor. The only position I'm currently carrying is RIMM. It showed a lot of strength during yesterday's weakness. There was support at 40 which was the previous low on the daily on 10/26. I picked up Nov 45 Calls with the stock @ 42.00. I sold half today @ 45.20 and will probably get stopped out of the other half given these 1-day trends lately.

BTW, just a follow-up on my views of the auto industry, here's a pretty good article by Professor David Yermack that came out on WJS this weekend.

http://online.wsj.com/article/SB122669746125629365.html

11/4 - 11/7 Day/swingtrades

2008-11-06T09:18:00.000-08:00

This week, there were more headlines on the ailing automobile industry. The GMs and Fords have been important to the US for the past century. However, over time, management changes, unions (IMO, primary problem) and government bailouts have changed the landscape. Our automobile industry can no longer compete in the world economy. The GMs and Fords have become benefit administrators and they're horrible at it. Any additional government assistance will just prolong the inevitable failure of this industry. I would rather see the government provide financial assistance to relocate and/or retrain our autoworkers in industries that are more competitive. Think outside the box like those geniuses over at Porsche:

http://news.yahoo.com/s/ap/20081107/ap_on_bi_ge/eu_germany_earns_porsche

Another interesting story is Yahoo. This is why company founders should not be running their own companies. Similar to many of my bad trades, Jerry Yang got too emotional with his position (YHOO holdings). Microsoft offered $33 and Jerry held out for $37 with no stop in place....now trading @ $12.20:

http://finance.yahoo.com/tech-ticker/article/122751/Jerry-Yang

As for my trading, I had too many meetings to attend and deliverables to crank out at work this week so I kept the trading extremely light. I also let a $3+ profit on the LDK position fade on me so that was a good sign that my head was not in the game.

LDK - I picked up Nov 15 Calls late Monday for a "Stewie" ONH hold/setup. I got the gap open on Tuesday that I was looking for and actually pulled the quote up while at work and saw LDK print 26.50. I should have raised the stop at that point but left it at break-even which was taken out the next day.

BUCY - I had picked up the Nov 30 Calls a few weeks ago. The stock tanked down to below $20 so I was very happy to see it climb back up to $28+. I used this opportunity to exit the position for $0.50 loss. Last week, these calls were printing $0.30 which was a $2.00 paper loss at the time.

UYG - I had higher hopes for this one as it actually traded up to 11.00 on Tuesday. I closed the position @ 10.00 for $0.50 profit on calls and shares.

I'm hoping for a lighter week so I can get in some decent trades in the mornings.

11/3 Day/swingtrade

2008-11-03T09:59:00.001-08:00

It looks to be choppy until the election is over. I don't see how the financials will rally with GS acting so weak. As for oil/energy, the Baltic Dry Index is below 1000. The fundamentals just don't look good. I'm not complaining, though. The rest of the world has been milking us with those high oil prices this past year. It's nice to get some relief at the pumps.

LVS - I used the gap open to unload the Nov 12.5 Calls from last week. There was still about $1.50 time premium on the calls so I figured I'd wait for a pullback and pick up the shares to get the 1:1 movement. I sold around 16.00 and netted $3.50 on the calls.

LDK - I picked up some Nov 15 Calls late in the day as volume and price picked up. Solar was strong today and overall, the sector has been beaten up so maybe we LDK can put in a couple more decent days.

10/29 - 10/31 Day/swingtrades

2008-11-03T00:21:00.001-08:00

I haven't made too many daytrades over the past few days. Friday, I took minor (0.25-0.50) losses on AAPL and MS before they broke out. I've been trying to outsmart the market and playing the stops too tight. I did have some swings that worked out pretty well:

LVS - Casinos have rallied pretty well the past few days. I picked up some Nov 12.5 Call w/ stock at $9.50 on Wednesday. Friday, I daytraded shares as the opening range high (12.00) was taken out. I sold the shares @ 14.50 but am still holding the Calls.

UYG - The financials aren't rebounding as quickly as the rest of the sectors, especially with GS stuck in a rut. However, if we've seen a temporary bottom, the think there will be $2-3 upside from here. I picked up some Nov 8 Calls and shares w/ stock around $9.40 - 9.60.

MaysTrade

2008-10-31T17:17:00.000-07:00

Welcome to the blogosphere, Billy! Check him out:

http://maystrade.blogspot.com/

During the trading day, Billy is usually over at Wallstreak or Dissect.org banking profits.

10/28 Day/swingtrades

2008-10-28T15:58:00.000-07:00

What an incredible short squeeze. The markets gapped open higher, traded back down to close the gap and just took off in the final 2 hours. It incredible to compare yesterday's close to today's. I only managed to hop onto MS for $1.00 profit late in the day. I'll look for a retracement in the AM to initiate some long positions.

BTW, I was speaking to my boss today about her retirement portfolio which is in the shits. I know most of you readers are "traders" but just in case you have a nest egg somewhere that has taken a blow, now is NOT the time to diversify. This may just be a bear rally and we may even go back down(doubtful) tomorrow. However, with this volatility, I think you're better off taking your portfolio and stalking a stock or two that can get you 20-50% on a short-covering rally like today (i.e., CLF, X, CF, SSO). For instance, FNM picked up 16% today and was at $1.90 at the beginning of October. The government has already committed to supporting FNM/FRE so what is the downside. If my nest egg was down 50% , I'd have a higher chance of seeing FNM go to $1.20 to pick up the 50% than wait on a diversied portofolio that may never recover to its value 1 month ago. Anyways, this is NOT a recommendation...just a different perspective for the longer-term trader/investor. Now is not the time to be loyal to those schmucks that have been taking regular fees from your accounts with no consequences when they lose your money. It kills me to see my friends/co-workers entrust their retirement money to money managers that have no experience trading and have only ridden the coat-tails of the recent bull market.

Fear & Greed Trader

2008-10-27T23:45:00.000-07:00

If you're having trouble daytrading this volatility, check out the human trading machine:

http://fearandgreedtrader.blogspot.com/

He's dialed-in, keeps it simple and banks six-figures on a daily basis!

10/27 Day/swingtrades

2008-10-27T14:28:00.000-07:00

Looks like the rallies are still getting sold. I think we continue this way until the Fed announcement this week.

OIH - I picked up some Nov 40 Calls as it broke out of the triangle. I got stopped out @ 84.50 for 2.50 profit on calls. That would have been a great time to go short but I was too busy with a conference call.

POT - I went with Nov 30 Calls as it broke out of the base. The action was pretty weak as I got stopped out for $0.20 gain. Again, that would have been a perfect time to flip to the short side.

10/21 - 10/23 Day/swingtrades

2008-10-24T00:46:00.000-07:00

I haven't traded much at all this week except for those energy swings on Monday and AAPL yesterday morning. Looking at those intraday charts the past couple days, I should have just called in sick for the week!

AAPL - I had time for one trade before heading out of the hotel yesterday morning. AAPL had a lot of selling pressure going into earnings on Tuesday. I just knew the afterhours gap could not hold in the AM as there would be too much profit-taking. Using the 1-min chart, I waited for AAPL to consolidate and cross below the moving averages. I shorted the stock for $2.80 profit.

OIH - After closing at the highs on Monday, the entire sector gapped lower on Tuesday AM. I sold @ 100.00 for $3.00 profit on the calls as OIH retraced most of the gap in the AM. There was another run-up late in the day but I was not around to get sucked in before the sell-off.

NOV - I should have taken profits on the run-up above $31 but eventually got stopped out for $0.30 loss on the sell-off.

BUCY - still holding the Nov 30 Calls.

10/20 Day/swingtrades

2008-10-20T20:10:00.000-07:00

Energy/commodities were all the rage today. I jumped the gun in the AM and took $1.00 losses on ANR and APA. However, as the day progressed, I entered a few low-risk setups for swings.

OIH - I entered Oct 50 Calls as the volume started picking up midday.

NOV - "The Fly" has been all over this one the past few weeks so I kept it on the radar. I picked up shares as the premium on the calls were a bit too high.

BUCY - This didn't participate in today's movement but earnings are in a few days and I'm looking for a pre-earnings run-up along with any strength in the energy sector. I went with Nov 30 Calls since the stock is trading pretty far off from the daily moving averages and mid-30's is possible.

I'm out-of-town the rest of the week for work so trading/posting may be limited.

10/17 Day/swingtrades

2008-10-17T15:00:00.000-07:00

Expiration day definitely lived up to its reputation today. There was a great opportunity to buy ATM/OTM calls at the open and then switch to puts mid-day as the market makers started squaring their positions and trying to "pin" stocks. I mainly stayed with GS and GOOG in the first half. OIH and basically all the energy/Ags were great options plays on the early morning dip as well. Too bad I didn't trade them.

GS - In addition to yesterday's Oct 100's, I picked up some 115's for only $1.00 as GS broke out of the 112 area. I sold the Oct 100's @ 118.00 for $9.00 profit and the Oct 115's for $2.50 profit as GS formed an intraday double-top @ 118.50.

GOOG - I picked up some Oct 380's around 376.00 for $2.80 as it broke out of the 370.00 narrow range. The premiums were still a bit high early in the day and GOOG had trouble breaking the 20-SMA on the daily at 385+(this level also coincided with the 20-SMA on the daily chart...see below) so I sold the calls @ $6.00 for $3.20 profit.

AAPL - What a loser stock today. I'm going to short this on the next leg down. I let my calls get stopped out at break-even in the morning.

Lastly, just to tie up some loose ends this month, I had a bunch of speculative positions expire on me. Each one was within my risk parameters except for OIH/UNG:

AIG (Oct 4 Calls) - I had locked in some profits and rolled the rest into Oct 4 Calls. The stock tanked along with the market after the rescue bill was signed. -$1.25 loss on Calls

C (Oct 25 Calls) - I had picked these up on the bullish looking daily chart. The Wells Fargo bid the following day derailed this trade. -$1.00 loss on Calls

FNM (Oct 2.5 Calls) - This trade also got derailed by the rescue bill sell-off. Loss - $0.25

OIH (Oct 165 Calls) - Damn, I forgot I even had these (Oct 165 Calls). I picked these up on a Monday or Friday just to see a gap open lower the next trading day. Obviously, they didn't recover. Loss - $3.90 on Calls

SMH (Oct 26 Calls) - Same thing here as for AIG/FNM. I had taken 1/2 off when it started fading. Loss - $0.65

UNG (Oct 33 Calls) - Apparently 33.00 wasn't the bottom. Loss - $3.40

10/16 Day/swingtrades

2008-10-16T15:11:00.000-07:00

Today played out very similar to last Friday. Morning selloff followed by a retest of the lows and then a bounce into positive territory. Most of the stocks on my watchlist either tested last Friday's lows or retraced to the break-0ut level. I've been using SKF/SRS/SMN/EEV to gauge the market direction. All those stocks started topping out before breaking down, which coincided with the market rebound off the lows. The action today was very bullish as we carved out a higher low compared to last Friday. We may be putting in a temporary bottom which would be nice given the carnage the past few weeks. Don't get me wrong, I'm all for shorting/puts but at these levels, the odds are better for a bigger move to the upside. Let's hope for another 1000 point move tomorrow!

OIH - I don't use this set-up as often as I should but many times, stocks will tag the moving averages (usually 15 or 30-min charts) before continuing the prior day's trend. GS did the same on the 1st 30-min candle but I didn't take that trade. Instead, I faded OIH with Oct 105 Puts as it tagged the 20-SMA on the 15-min chart. I switched to the 5-min chart to manage the exit and was taken out at 87.00 for $4.50 profit...before OIH moved even lower.

MS - I took a $0.40 loss as I entered in no man's land @ $17.60 in the middle of the day with a stop @ 17.20. Looking back at the 5-min chart, I don't know why I even entered at that time and how I came up with that stop instead of $16.90 ($0.10 below the morning low)...basically overtrading.

GS - Picked up some Oct 100 Calls @ 108.30.

AAPL - Picked up some Oct 100 Calls @ 97.00.

BTW, my biggest regret of the day was GOOG. I pulled up the chart @ $315 and saw a potential double-bottom ($310). I then pulled up the options but all the premiums were ridiculous ahead of earnings. Looking back, I should have halved my position size and just bought the stock which would have been good for $30+ into the close. I wouldn't have held over earnings, though.

10/15 Day/swingtrades...none

2008-10-15T18:34:00.000-07:00

Damn. I went into cash yesterday and had a lot of ammo to deploy when the market opened. Unfortunately, I was out of town on business and wasn't sure if the meeting schedule would allow me to manage any positions. I thought OIH was the best looking short (break below 98.00) in the AM but was headed out of the hotel when it started breaking down so decided against initiating any positions that may ruin my day. I'm happy I avoided the bloodbath but not happy about all the missed opportunities. I hope some of you were able to make some decent trades today. In contrast to Monday, ATM/OTM PUTS in energy/commodities would have paid out very nicely.

With 2 days before expiration, there should be lots of more opportunities to trade the volatility with exceptional risk/reward using ATM/OTM options. My plan for tomorow...if the markets gap up, I'll fade it to last Friday's lows. On a gap lower, I'll use the opening range high to pick up Calls and catch a move back to the moving averages. Scanning last Friday's charts will be helpful to prepare for tomorrow.

10/14 Day/swingtrades

2008-10-14T14:00:00.000-07:00

Apparently, even the "professionals" are getting killed. Here's a link to the Journal article:

http://online.wsj.com/article/SB122394318763531045.html

"...Mr. Cohen, for instance, sold near half of his stock holdings last week, closing out the positions of roughly 50 managers who work for him because he felt they "weren't seeing the ball," says a person familiar with the situation. Mr. Cohen's decision was made at the end of September and comes from an attempt to stem this year's losses. He now plans to keep that money on the market sidelines for the rest of the year, though he is still trading a small portfolio, along with a few other managers. The managers whose portfolios were shut are feeding Mr. Cohen short-term trading ideas, the person says."

This morning's gap open was the perfect selling opportunity after the monster run-up yesterday. I was so busy closing out long positions in the first 30-40 minutes that I missed some opportunities to go short. I'm back to cash and will see how the market reacts to earnings.

GS - 2 weeks ago, I picked up a few Oct 130 Calls. I had assumed these would expire worthless. Instead, I used this morning's strength to close out the calls for only $0.50 (vs. 3.50 yesterday) loss.

MS - This was the biggest overnight winner for me due to my position size. I picked up $3.50 on the Oct 19 Calls. The Calls were only trading @ 1.15 when I bought them yesterday. The chart is very similar to that of UYG. For some reason, my charting software won't send me the chart for MS.

UYG - I closed this position at the open for $2.00 profit on the Oct 8 Calls.

AAPL - This was weak all day. I started this position with Oct 95 Calls on Friday when AAPL was back @ $95+ so I let it slip a couple dollars before finally exiting yesterday's Oct 110 Calls @ $112+ for $2.50 profit. I tried going short with Oct 110 Puts late in the day but got stopped out for $1.00 loss.

10/13 Day/swingtrades

2008-10-13T15:31:00.000-07:00

I started this post yesterday:

Now that was a f'n rally!!! I wish I were posting some monster gains today but my excuse...insomnia. The winds were howling last night and I found myself looking at charts and reading news since 3:30AM PST. By the time the market opened, I was a zombie. I missed the first bounce off the moving averages but caught some of the late day craziness. BIDU and GOOG were definitely the options expiration trades of the day. Any ATM/OTM options in the morning would have paid off handsomely.

AAPL - I picked up about $8.00 on those Oct 95 calls purchase on Friday. I rolled the profits into Oct 110 Calls in case we get some weakness tomorrow.

UYG - Picked up Oct 8 Calls @ 10.02

MS - Picked up Oct 19 Calls @ 17.87

GS - This was the worse non-trade all day since I had it down on the gameplan. I was staring at this @ 100, 101, 102...it just never clicked to pick up the Oct 105 Calls which were trading $3+ at the time.

10/10 Day/swingtrades

2008-10-12T20:54:00.000-07:00

I spent most of Friday morning torturing myself for selling all the OIH puts on Thursday. After trying to keep up with the wild market swings, I finally took some AAPL Oct 95 Calls home. We may get a gap open tomorrow morning as current futures suggest but I'm willing to miss out on the gap and enter on a pullback. If we finally get the rebound that everyone is expecting, I'll be looking to enter at-the-money options in UYG, AAPL, GS and OIH. I also like FNM/FRE shares. At $1, the long-term risk/reward looks good.

The fundamentals are still horrible so any bounce will be purely technical. Also, any bad news from MS or some of the dow components such as GM will send this market right back down. We're going to get earnings from a bunch of the banks (C, JPM, MER, WFC, ZION, etc) as well as GOOG so for the daytraders, the volatility will march on. Stay nimble and don't forget those stops/trailing stops!

10/9 Day/swingtrades

2008-10-09T13:01:00.000-07:00

I didn't have time to post this draft on Thursday because I wanted to include the OIH chart...

So much for a "rip the face off the bear" rally. October is definitely living up to its reputation as crash month. We've now moved 2000 points lower on the Dow since the bill passed and 2400 since the original bill vote in which Pelosi ran her mouth off. Now, she wants to propose a $160 Billion stimulus package. Had she kept quiet, we may have had a chance to stem the fear in the capital markets and stop the trillions that have been wiped out. Obviously, there are other major problems at hand but a lot of it is psychology(fear) and I still believe we had a window of opportunity to prevent this meltdown during that first vote.

Anyways, it is obvious nobody wants to risk the little money they have left in the markets...unless you're a short-term trader. I was glad to see the short ban expire as the bid/ask spreads on puts finally closed up. Unfortunately, stocks I wanted to buy puts on (asset managers LM, BEN, BLK) have already made the move lower the past few days.

Today was take your pick to short day at 11AM. I went with OIH. I should have held through Friday but did pick up $4.00 on the Oct 130 Puts.

I found a narrow range on WFC and went long (this was before everything broke down) some shares @ 28.30 but was stopped out at break-even 30 minutes later. I'm not including the chart because there are too many trendlines/moving averages to see anything helpful.

10/8 Day/swingtrades

2008-10-08T13:58:00.000-07:00

That was a true roller coaster ride. Maybe this is a contrarian indicator but I'm starting to think we may just head straight down without a rally. Everyone is looking for capitulation but the problem is that the hedge funds are facing massive redemptions and middle-America is moving their money out of the mutual funds and into cash. Aside from day/swingtraders, no one wants to dive back into the markets. The Fast Money guys are discussing a potential "rip the face off the shorts" rally. I say what shorts? We just dropped 1000+ points with a short-ban in place! Anyways, we'll see how this plays out tomorrow.

I made a few trades the past 2 days but net-net, I've been getting chopped up.

10/7 - GS, stopped out of Monday's remaining shares @ 117.50...$1.00 profit
10/7 - OIH 125 Calls, stopped out in AM for $1.00 loss
10/7 - Picked up UAUA 12.5 Puts and sold for $0.70 profit as it dipped to 5.00. Nice call last week on the airlines, Darwin!

10/8 - C, picked up $1.30 after it moved out of the base at $14.00 along with the rest of the market
10/8 - AAPL, picked up Oct 90 Calls as the market rallied and stopped out late in the day for $1.00 loss
10/8 - LDK, picked up shares @ 22.30 and stopped out @ 21.40.

BTW, want to make 60 points in one day? Follow this trade and then go get yourself a heart monitor with your profits:

Buy SKF puts this AM @ 150 and sell them @ 136. Then go long shares @ 136 and take it up to 150 again...then switch back to Puts and ride it down to 134. Lastly, go long @ 134 and sell @ 150 at the close.

10/6 Day/swingtrades

2008-10-06T20:00:00.000-07:00

Wow, that was one nasty looking seesion! Thank goodness for the $700 Billion "Rescue" package that was approved too late. Trillions have been wiped out of the markets. And, how about that short-selling ban. With no shorts to cover, there is no one to cushion these sell-offs. Paulson/Bernanke are running out of ammo and have yet to address the "fear" in the markets. Everyone has seen the bazooka and they're not impressed. Time to unveil the f'n new and improved Death Star! I say coordinate a global interest rate cut and bypass the banks by lending directly to companies in need. IMO, those are the only 2 ideas floating around that have a chance to stabilize the world markets. At some point, housing needs to be addressed but there is still too much excess that needs to be worked off. Around my neighborhood, people still think they can command 2005 prices...fogettaboutit!

Sadly, I hope we don't see anymore of this...

http://news.yahoo.com/s/ap/20081007/ap_on_re_us/bodies_found

Today, I missed the early AM breakdown but caught a couple reversals.

GS - 115.00 has been good support since this is Warren Buffet's exercise price. I picked up some shares after the $115.00 retest @ 116.50. I sold 1/2 near the close @ 125.50 for $9.00 profit.

AAPL - I picked up some Oct 50 Calls as AAPL found support around 88.00. I had an open order to sell once it hit the opening range high so got out a bit too early. Picked up $4.00 on calls.

I also took home some OIH Oct 125 Calls and still holding positions in FNM, AIG and SMH.

10/3 Day/swingtrades

2008-10-05T16:00:00.000-07:00

The markets sold off on the rescue bill approval as expected. Psychologically, the window of opportunity to stop the bleeding in the markets closed with Monday's votes. Time for Paulson/Bernanke to try something else.

GS - After the first leg down, I waited for some consolidation before entering an order for puts on a break-down below 135.50. GS setup again so I pyramid @ 133.50 and finally exited @ 129.50 for $5.00 profit on the puts.

SOV - I sold the remaining position at 6.00 as the market started rolling over. This started off as a low-risk daytrade @ 4.24 so I'm satisfied with catching the extra move.

AIG - I sold some more AIG 2.5 Calls and rolled the remaining position into Aug 4 Calls to manage the downside. In hindsight, I should have just stayed out after selling the Oct 2.5's. But, I've already locked in a decent profit and am trading with the "house's" money so can affort to let the profits run a little longer in case we get a snap-back rally.

10/2 Day/swingtrades

2008-10-02T11:35:00.000-07:00

I think a lot of people complaining about Monday's bailout vote are regretting that they complained about it. The sheer wealth destruction this week is incredible. Middle America is going to go into psychological depression when they get the next IRA/401k statements. We may get a snapback rally if/when the government intervenes but over the long haul, our capital system is broken. Moms and Pops of America will think twice about redeploying their cash in the markets and/or discretionary spending which will lead to a long and drawn out recovery...if there is one. The "bailout"....fogettaboutit! I think it is getting priced in and over the past few days, people realize that it may fix the credit crisis but not the looming economic crisis so I want to fade any rally. Instead, we need a "surprise" event like a huge Fed rate cut, a gigantic stimulus check to ALL tax payers (yes, boohoo me but I got nothing from the gov this year) or Warren Buffet getting sworn into office!

Myself, I spent the day at the local ER. Instead of waiting for the Ags to break-down, I caught the falling knives of MOS and CF. I got stopped out for $2.00 loss on each. DITM Puts would have provided $6.00 in MOS and $10.00 in CF...serves me right for fighting the tape. I only bought a few hundred shares of each so maybe more like butter knives...but still got cut. It's crazy to see these stocks get obliterated. CF was trading at $125 on 9/22!

UNP - I thought this would break-down a little further so picked up some Oct 80 Puts but was stopped out an hour later for $0.50 loss.

SOV - I took a little more off the table @ 5.88 after it tagged 6.00 twice and couldn't break through.

10/1 Day/Swingtrades

2008-10-01T23:20:00.000-07:00

Another chopfest...up, down, up, down. The financials held up pretty well and the late-day buying is becoming common...but will it last. Ags/energy took a hit and it worsened afterhours for Ags as MOS got clobbered. 2 months ago, BG reported great numbers but fell apart and I thought the markets had it wrong. Apparently, this global slowdown theme is really sinking its teeth in. It's hard to believe everything would fall apart so quickly but as we've seen with the Baltic Dry Index, the trend is still downward.

C - I picked up some Oct 25 Calls late in the day. Check out the daily close above the highs 4 months ago...impressive.

SOV - A partial re-gift today. After re-editting last night's post on the bull spread this morning, I pulled up the intraday chart and saw that SOV was finding support at the $4.00 area again. Yesterday's set-up was better with the strong market. Today, I had to wait for confirmation and didn't completely load up due to the market weakness. I picked up a few shares @ 4.24 and took partial profits @ 4.90. For the remainder, I sold the shares and established an equal position in the Oct 2.5 Calls to limit my risk in case the stock craters but still keep my upside open.

FNM - I added FNM Oct 2.5 Calls to the shares I picked up last week. FNM traded in a very narrow range today and could be coiling for a move higher pending rescue plan approval. Let's milk this trade, D!

SOV Bull Spread? - Corrected Max Gain Below...targeting Oct 7.5 Calls better...

2008-09-30T23:00:00.000-07:00

"Steveplace" corrected the max gain to be $1350 making this closer to 1:1 risk/reward with the Oct 5's. Not enough gain for me. I corrected the spread using Oct 7.5's below. Looking at SOV's action so far today, I'm not thrilled.

Assuming this financial mess corrects itself over the next few weeks, I'm going to consider a bull spread on SOV. BTW, SOV traded in a tight (0.05) range today setting up a great base-and-break daytrade. 10:1 reward to risk if you sold at $5.00 with a stop at $3.90...damn, where was I?! Here's what came out on Briefing.com:

"...Co also stated that SOC is well capitalized, according to all regulatory requirements. Co has unused committed liquidity of $12.0 billion from the Federal Home Loan Bank of Pittsburgh and the Federal Reserve. Co has undertaken a methodical process to reduce risk in recent months, including the liquidation of its entire CDO portfolio. Sovereign has only $200 million in debt maturing over the next 15 months at the holding company. Co is fundamentally sound by all financial and operational measures. Co is confident that this team will greatly improve their leadership as they intensify their focus on the fundamentals of their core franchise and conservatively manage their balance sheet."

Bull Spread - I like this set-up because the open interest and volume has shot up on the Oct 5's, thereby pushing up the implied volatility and option price as compared to the Oct 2.5's. Here's the breakdown using 10 contracts as an example:

Oct 2.5 Calls - asking 1.80, bidding 2.05, buy 10 @ 2.00 = $2000

Oct 7.5 Calls - asking 0.25, bidding 0.30, sell 10 @ 0.25 = $250

Max Risk - If stock goes to zero, you lose $1750 ($2.00 - $0.25 = 1.75 x 1000)

Max Gain - If stock trades at 7.50 on expiration, you profit $3250 ($5.00 - 2.00 + 0.25 = 1.35 x 1000)

2:1 for reward/risk...not bad but still a little too safe for me. I'm going to wait for another base-and-break to pick up the Oct 2.5 Calls and then sell the Oct 7.5 Calls when it starts to fade. Maybe I'll be able to pick up $0.50-$1.00 more than the scenario above.

9/30 Day/Swingtrades

2008-09-30T22:09:00.000-07:00

Down 700+, 400+...what's next?! Expect this to be the norm with the short-selling ban and credit fears still in play.

MS - I picked up $1.50 on MS on a base-and-break daytrade. I took half off after $1.00 and closed the other half after hitting $2.00 profits.

UAUA - I picked up some Oct 7.5 Puts when it broke below $8.00 and sold them when the markets pulled up the airlines along with everything else. $0.15 loss on Puts.

AIG - I picked up some Oct 2.50 Calls as it broke above $3.20

9/29 Day/Swingtrades

2008-09-29T16:52:00.000-07:00

Wow, more panic selling and it doesn't appear to be letting up anytime soon. People are pulling there bank deposits and most likely moving 401k's and IRA's into cash. That is not a good sign for the markets. On top of all that, the markets are waiting for the politicians, the same ones that promoted this mess the past few years, to bail us out...scary thought.

I try to stay away from the politics when it comes to trading but when I heard Nancy Pelosi's speech, I thought..."What the hell is she trying to do?!". I thought that was a horrible time to bash the Republicans. She should have used the speech she gave post-vote which was much more bipartisan. That may or may not have been the difference but better to stop the bleeding now and blame later. The bailout plan is not great by any means but it is not good for America or the world economies to have a systemic break-down of the capital markets. Here's a decent article on how the shippers are affected:

http://www.forbes.com/2008/09/27/shipping-china-closer-markets-equity-cx_ra_0926markets37.html?partner=yahootix

Anyways, I want to lean short but these gap-down days with the threat of a rally on bailout news have made entries tough to find.

OIH/UNG - I'm still holding. The gap lower means I'm down over $2.00 on each position but there's still a lot of time premium so I'm willing to wait on a rebound to get out of those bad trades.

SMH - I sold half for $0.30 loss when the stock broke below 24.50.

C - I sold the calls in the AM for $0.50 profit. I then re-entered as it broke out of the base on the 5-min chart @ 20.20 and picked up another $0.50 on the shares.

APA - I tried bottom-fishing with a small position as it bounced off the 101.00 level but later got stopped out for $1.50 loss.

AAPL - I picked up $1.00 on the Oct 130 Puts as it broke down from 105.00 to 103.50.

9/26 Day/Swingtrades

2008-09-28T17:03:00.000-07:00

Friday, it looked like everyone was positioning for weekend news the last hour. It's crazy to watch the low volume spikes with the ban in short-selling, especially with the NYSE ringing the bell 1 minute too soon. Pull up the 2-day 1-min chart on STT. COF, ZION and JPM also spiked in the last few minutes. Let's see if our "elected" politicians can come to some agreement this weekend without any theatrics.

As I mentioned on the previous post, I got nailed for holding POT and WB calls overnight. So, I spent the morning looking for good exit points and also trying to position for the weekend.

POT - Ouch...even for the small position
Bought @ 158.00,
Sold @ 149.50
Loss - $8.50 on Calls

WB - I should have dumped this when it didn't participate in yesterday's rally.
Bought @ 15.25
Sold @ 10.00
Loss - $2.50 on Calls

UNG - I picked up some calls as it traded back down to the 33.00 support level. This area has been decent support the past month so I like the risk/reward.

OIH - I picked up some Oct 165 Calls at the close. This is the same logic as last week. Oil looks like it wants back up and any rescue package should weaken the dollar and strengthen commodities.

I added some more SMH Oct 26 Calls and am still holding the C Oct 17.5 Calls from yesterday.

9/25 Day/swingtrades

2008-09-28T16:50:00.001-07:00

I've been sloppy with tracking my trades and have paid the price.

AAPL - I got in late on the run-up to 134.00 so took $0.50 loss on the Oct 100 Calls when the stock fell back below 131.50 towards the end of the day. Glad I didn't hold overnight (which I considered) with RIMM missing earnings after the close.

C - I picked up some Oct 17.5 Calls as the stock broke out of the 19.40 area.

FNM - Despite the dilution with the government taking up 80% of FRE/FNM, these guys have been holding up very well. I picked up some shares @ $2.20 and sold the Oct 3 Calls which brings my break-even down to $1.70.

POT - I picked up some Oct 100 Calls as the $155 area held up pretty well. Not a good idea given the gap lower on Friday.

9/24 Day/Swingtrades

2008-09-24T09:26:00.000-07:00

Yesterday's trades:

GS - I sold the shares @ 129 for 13.00 profit. As it consolidated on the 5-min chart, I picked up some Oct 70's @ 130.50 and sold 1/2 for 2.50 profit around 133.50 and got stopped out at breakeven on the 2nd half at the close.

AMGN - There was too much support under 58.00 so I sold the Oct 65 Puts for $0.50 loss. Looking at today's tape, I should have flipped to calls.

SMH - I joined Darwin with some Oct 26 Calls.

WB - I picked up some Oct 12.5 Calls @ 15.23 as the stock traded back above the moving averages on the 30-min chart and in anticipation of the bailout news.

9/23 Day/Swingtrades

2008-09-23T21:16:00.000-07:00

Up then down...back up and finally back down. Today was all about closing Friday's gap. Ags were a good short today but I hesitated on the morning market strength.

POT - I picked up Oct 100 Calls @ 166.00 after the gap closed. I was sitting on $5.00 profit before that evaporated into a $2.50 loss in the final minutes. I should have moved the stop to break-even but thought POT would rebound like GS did below.

GS - I picked up a few Oct 180 puts @ 116.00 but got stopped out awhile later for $0.40 loss. The bid/ask spread tightened today so going "short" financials is still possible. However, timing is important since you won't have short sellers to help push the stock down. As the market turned, I went long some shares as GS traded above the moving averages. Looks like Buffet will be helping but that may be tempered by GS's equity offering...we'll see. Here's a chart showing the gap closure:

BTW, I'm sure the Buffet info got leaked...probably GS buying there own stock. Typical Wallstreet shenanigans. However, no way the stock goes straight up like that on low volume if shorting was allowed.

9/22 Day/Swingtrades

2008-09-22T10:09:00.000-07:00

So much for banning short-selling, huh? Financials were weak all day and were an obvious short...if you could short them. Shorting via DITM puts was an option but the bid/ask spread would cost you $1-2 in premium. If you were buying puts in GS, $1-2 dollars would have been acceptable if you knew it would come down $9+...I didn't.

BTW, Para-Olympics concluded in Beijing on 9/17. Maybe all the cars and factories are up and running again. Oil sub-$100 was very short-lived!

Looks like this week will continue last week's volatility. I think most stocks will retrace Friday's gap as everyone takes their profits and as soon as the bailout is approved and finalized, we'll get another rebound.

I was a bit too trigger-happy today...

SRS - Moved the stop up too soon. Bought @ 73.20 and stopped @ 74.50.

AAPL - Bought @ 136.63, Stopped out at @ 137.10...and didn't re-enter...

MOS - Bought @ 95.00, Sold @ 96.70

AMGN - Bought @ 58.33, Oct 65 Put...time to close the gap at $54!

9/19 Day/Swingtrades

2008-09-19T15:48:00.000-07:00

I've been so stuck on daytrade-mode that it didn't dawn on me to take some OTM call options home. This similar scenario played out in July when the government intervened and I was quick enough to take home a bunch of call options on the banks. This time I talked myself out of it so only had AAPL calls to sell in the AM. Regarding the government intervention the past few days, I think it will temporarily halt the slide and fear in stocks but over the next few months, we still need to deal with lousy earnings and a continued weak economy. Also, here's an interesting tidbit on supposed naked short-selling:

http://www.thestreet.com/story/10438109/2/kass-blame-the-blamers.html

Anyways, this was a crazy week. I hope everyone took home some gains or at least didn't lose too much due to the craziness. I'm currently 100% cash and will see if any trends develop next week. After the monster moves the last 2 days, I'd rather wait for a pullback than chase anything at this point. Some of these stocks are higher than where they were 9 months ag0...ridiculous. Once these financial companies/holders factor in the billions of dollars lost in the past few weeks, I think the market will retest the lows. In the mean time, this theory won't prevent me from participating in any tradeable rallies. Energy/commodities may be back in favor based on Friday's late-day strength. Also, all this debt that the government will absorb is not good for the dollar...but good for oil.

As for Friday:

AAPL - I sold yesterday's remaining Sep 130 Calls @ 142 for $9.00 profit.

GS - I entered long too early and got stopped out for $1.00 loss on Sep 120 Calls. As it consolidated into a range in the afternoon, I picked up Puts as it broke below 127.00 and sold @ 122.00 for $4.00 profit on the Puts.

GOOG - I was hoping for a break-out above 150 but instead, took a $1.00 loss on the Sep 450 Calls.

9/18 Day/Swingtrades

2008-09-18T15:34:00.000-07:00

Wrote this yesterday but forgot to post. Wish I held all those longs...

Another wild f'n day! I was short all morning for some gains and then got caught holding BEN puts just as I was about to pat myself on the back. After going to cash, I cleared my head and went long a few calls but it felt like I was picking up the scraps. So much money left on the table...

Shorts

GS - I picked up $5.00 on the Sep 140 Puts as it broke the opening range low @ $105. I sold @ 99.50. Then, I was getting my order ready to re-enter and double-up with Sep 105 Puts as it consolidated and broke through $99.00 but I was 5 f'n seconds too late as the $10+ freefall took off without me. I need to use automated contingent orders more often.

MS - This set-up a very tight range at $20.20 before breaking through. I picked up only $2.00 with Sep 30 Puts as it retraced on me before falling down to $11.70.

BEN - What f'n timing. I was trying to decide between SKF Puts on the double-top or BEN Puts on an inverse HG. Wrong choice. I went with BEN 95 Puts as it crossed below 82.50. The market turned on a dime and I ate a "hefty" $6.00 loss as BEN rallied to my "uncle" point of $88.00.

Longs

GS - After the reversal, I waited for GS to pull back and re-entered with Sep 105 Calls @ 106.00. I dumped the calls @ 114.00 for $4.00 profit.

AAPL - I was trying to decide which tech to go long in the last hour. I looked at BIDU, GOOG and AAPL. BIDU looked like it was lagging and apparently it caught up and took off after I looked at the chart. I picked up AAPL Sep 135 Calls @ 132.50 and dumped 1/2 at $135.00 for $1.00 profit.

Net-net, I made some money but missed a lot of great moves today. The 5-min charts on WB and FED looked great for low-risk entries. In the last hour, BIDU and CME were the options expiration plays of the day. BLK reversed big as well but I did look at those OTM options and the bid/ask spread was too far apart at the time.

9/17 Day/Swingtrades and...NO Gasparino!!!

2008-09-17T17:26:00.000-07:00

That was damn ugly today...if you were on the wrong side of the trade. I was on the wrong side with energy/commodities early on but switched over to financials.

OIH - I thought energy/commodities would close the gap but looks like buyers were waiting until late in the day.
Bought @ 154.90, Sep 150 Calls
Sold @ 154.35
Loss - $0.49 on Calls

X - Same thinking as above
Bought @ 94,78, Sep 100 Calls
Sold @ 90.83
Loss - $0.70 on Calls

GS - I traded the same set-up as yesterday after GS bounced off the moving averages. I'm glad Gasparino didn't get in the way today.

Bought @ 122.00, Sep 130 Puts
Sold @ 102.00
Profit - $17.00 on Puts

SKF - I picked up just a few bucks from 138 to 140.50.
Bought @ 137.80, Sep 100 Calls
Sold @ 140.30
Profit - $2.50 on Calls

UAUA - Sold at the open for $0.30 loss

UNG - Bought Sep 35 Calls at the close

9/16 Day/Swingtrades and Gasparino!!!

2008-09-16T08:20:00.000-07:00

This guy must be drawing a check from the Plunge Protection Team. Everything was going well with my calls(puts) until his bullshit announcement. I didn't want to get bitten again on an AIG announcement so waited until after the Fed announcement to trade.

SRS - Stopped out for $0.50 loss on Sep 90 & 95 Calls.

SKF - I just began the trade off the moving averages before Gasparino came on. I was sitting on a hefty $8.00 loss but was patient let the stock retrace after the fear subsided. Picked up the calls @ 132.00 and sold @ 130.00 for $2.00 loss.

GS - I traded in an out of this but ended up getting stopped out each time for $2.00 loss on Puts.

OIH - I picked off $1.00 on the Sep 150 Calls as it rallied along with the energy sector in the last hour.

UAUA - I picked up some shares @ 13.80 as it broke the opening range high. I'll dump these in the AM if oil shows some strength.

Enery/commodities showed a lot of strength towards the close. With all this government intervention and bailouts, the dollar should weaken a bit feeding into already oversold sectors. If this sector shows strength tomorrow, I'll be using the 20-SMA on the 30-min chart for low-risk entries. I'll be focusing on the usual suspects (OIH, APA, DO, BUCY, HES, NOV, POT, CF, X, CLF and solars) for big moves and position with at-the-money calls.

Also, if the market goes higher, ESRX looks like it wants to break-out of that 76.00 area.

9/15 Day/Swingtrades

2008-09-15T14:13:00.000-07:00

What a wild f'n day! We would have been much further along in a recovery had Paulson let Bear Stearns fail 6 months ago and put the fear in all the banks to clean up their acts. Instead, the government's bailout and subsequent lending facilities just postponed the inevitable. I wouldn't be surprised if Paulson lets them all fail until his cronies at Goldman are the only ones standing. This market action is setting up for a very ugly October.

Regarding options expiration set-ups this week, the premiums are still a bit high given all the volatility so I'm going to wait a couple more days as we get closer to Friday to load up on at-the-money options for intraday trades.

GS - I picked up Sep 180 Puts @ 147.35 and sold waaaay too early @ 144.00 for $3.00 profit on the Puts.

LM - I sold my remaining position for $5.00 profit on the Puts. It will probably go lower tomorrow but with GS reporting and the Fed meeting, I didn't want too much exposure overnight.

BUCY - I got stopped out of my remaining position at break-even.

SHLD - I sold this out flat after the open.

UNG - I used the intraday spike to unload this for $0.20 loss on the Calls.

Swings

WNR - I'm glad I rolled my position into the Sep 12.5 Calls. Despite today's drop, I've still got half my cost intact on the premiums so I'll wait it out another day.

SRS - I picked up some Sep 90 Calls when the stock broke 88.00 and then some Sep 95's at the close. A few fellow bloggers have said that commerical real estate is the next shoe to drop and I believe it. With all these banks selling assets to raise capital, it will be a fire sale. Have you driven by your local "industrial" park or office centers lately? The ones in my area are like a ghost town.

9/12 Day/Swingtrades

2008-09-12T10:36:00.000-07:00

Man, this thing was big a week ago before hitting Cuba. Hope everyone in the Texes/Louisiana area stayed safe this weekend.

CF - I sold the position when CF retested the intraday high and fell back. Picked up $5.00 on the Sep 115 Calls.

ICE - I dumped these calls as the stock retraced to 90.00. Prior to announcing record volume on its exchange, they presented some slideshow that indicated a dilution to earnings due to the Creditex acquisiont. I'm out for $0.75 loss on Sep 95 Calls.

WNR - Nice call by "The Fly" on http://www.ibankcoin.com/. I picked up some Sep 10 Calls and shares that I sold at the close for $1.00 profit. I then rolled some of the profits into the Sep 12.5's. If there's another sell-off on Monday, I'd rather see the $0.70 for the Sep 12.5's go to zero than the $2.50 for the Sep 10's go to zero. On the other hand, if WNR jumps a few points, I'll only miss out on $0.70 of the move...risk management.

Still holding BUCY Sep 45 Calls, SHLD 100 Calls (I may have caught this at the end of the move so I'll let it go below 99.00 and re-enter later), LM 45 Puts and UNG 35 Calls.

9/11 Day/Swingtrades

2008-09-11T12:00:00.000-07:00

What a f'n day to have technical problems. I spent the 1st 2 hours of the day getting OptionsXpress to honor my trades so ended up playing catch up all day. That was a strong rally off the opening lows so maybe we get a near-term relief rally.

BUCY - I took 1/2 off the table @ 47.80 for $2.00 gain on the calls.

LM - I took 1/2 off the table @ 39.80 for $3.00 gain on the calls.

SHLD - I picked up some Sep 100 Calls. This stock has been bucking the trend along with the retailers. It has a high short interest and just broke resistance at 96.00. This has wild swings so I picked up the OTM calls for some cushion.

CF - I picked up some Sep 115 Calls in case the Ags just formed a double-bottom the last few days.

ICE - I picked up some Sep 95 Calls.

9/10 Day/Swingtrades

2008-09-10T20:30:00.000-07:00

I managed to scalp about $0.50 on X above 101.00 today. Otherwise, I didn't see many great set-ups.

BUCY - Per last night's post, I picked up a few BUCY 45 Calls at 44.00 and again at 45.00.

UNG - Still holding.

LM - My 1st target was $41+ so I would have taken partial profits on the dip to 41.40 but the movement was too quick. Goldman downgraded the asset managers so look for continued weakness in this sector.

DITM vs. ATM/OTM Options

2008-09-09T20:26:00.000-07:00

RB posted a question as to which options I trade as expiration week nears. Generally, I'll switch to at-the-money options on expiration week. However, it all depends on the stop level, volatility, option premium and target exit price. Here are a few examples:

BIDU - Today it opened up above $270. Assuming you believed (in hindsight, this looked like a great set-up...where the F* was I?) that it would retest the recent lows due to the market weakness, there was a good entry point at $269 on the 5-min chart. I would have targeted the recent lows at $260, so a $9.00 move.
Stop-level - $271.00, so $2.00 risk
Volatility - highly volatile so high premiums
Option Premium - I'm guessing Sep 270 Puts would have cost about $12.00 w/ BIDU at $269.00. Sep 320 Puts would probably have cost $51.50 w/ BIDU at 269.00
Target Exit Price - I would have exited at $260.00, the recent low. Assuming you are risking $1000 on each trade, 10 Sep 270 Puts would have cost $12k and you probably would be able to sell the Puts @ $16.00, making a profit of $4k. With Sep 320 Puts, you'll have to put up $51.5k for 10 Puts but you'll make about $9k. Some would argue that percentage-wise, you're making more with the Sep 270 Puts. However, I'd say $9k is still more than $4k. With DITM options, you need to focus on the dollar movement not the percentage movement.

BUCY - I "believe" this has been oversold along with the energy/commodity sectors. When it reverses, it could easily get back to $51.00. At $43.50, that's a $7.50 move.
Stop-level - Assuming $43.50 holds, I'd say a stop @ 41.50 so $2.00 risk
Volatility - highly volatile so high premiums
Option Premium - This has gone down so far, you can't even get DITM options. In this case, I'd go with the Sep 45 Calls
Target Exit Price - Assuming you are risking $1000, 10 Sep 45 Calls would cost $2k and at $51, they should be worth about $7.50. If you get stopped out at $41.50, you'll only lose $1-1.50 on the Calls.

LM - I picked up LM today due to there exposure to FNM/FRE as well as LEH. My target is $41+.
Stop-level - I picked these up late in the day so my stop would be back at the early AM highs around 47.50.
Volatility - not as volatile as the stocks above. If I went with DITM, the Sep 50 Puts would do the trick.
Option Premium - At the current price, there is about $1.30 premium on the Sep 45's (2.60 ask) and only $0.30 on the Sep 50's (6.60 ask).
Target Exit Price - Assuming you are risking $1000, 10 Sep 45 Puts would cost $2.5k and at 41.00, they should be worth at least $4.50 giving you $2k profit. The $1000 risk should get stopped out at $47.00. On the other hand, with the Sep 50's, you'll only be able to pick up 3 Sep 50 Puts (more if you tighten your stop) to keep your loss at $1000 if you get stopped out at 47.00. At 41.00, the Sep 50 Puts should be worth at least $9.00 giving you only $700 profit.

Regardless of the stock or trade, I always try to determine my stop-level and target price which enables me to position-size and select the options accordingly.

9/9 Day/Swingtrades

2008-09-09T15:00:00.000-07:00

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

9/8 Day/Swingtrades

2008-09-08T13:50:00.000-07:00

Another wild day and more commission to my broker.

BIDU - I sold the remaining position @ 280.50 when the opening range could not hold.
Bought @ 267.82
Sold 1/2 @ 274.00 & 280.50
Profit - $9.00 average on calls

WM - This dropped all the way down to trigger my stop. I decided late in the day to re-enter based on the rebounding volume but may let it go if the stock doesn't rally tomorrow since it didn't participate in today's strength. There are plenty of stronger financial stocks out there.

ABK - Here's another one that triggered my stop. I want to play the longer term trend on this so I re-entered around 8.40 with about $0.20 slippage on the calls.

AMGN - I picked up some puts as it broke below the $60.00 support level.

STI - I picked up some calls as volume and price rallied into the close.

WB - I picked up a few shares as it bounced off the moving averages on the 15-min chart but my stop was too tight so it was triggered a bit later for $0.20 loss.

Deja Vu last Monday?!

2008-09-08T09:01:00.000-07:00

If you saw my watchlist, you'd think we were down 200-300 on the Dow instead of up. I dumped everything except UNG.

Fading the open would have resulted in massive gains. The tape looks just as sick as last week. Tread carefully.

9/8 Stocks I'm Watching

2008-09-07T20:19:00.000-07:00

Looks like we'll get a decent move in the financials this week. I may add to the WM and ABK calls if they catch some of the momentum. MBI is another one that has held up pretty well all last week:

I'll be looking to re-enter ICE on a pullback as well as some of the energy/commodities as IKE may spark another run-up. I still think this will just be another bear rally that lasts only a few days, so I'll be looking for short candidates as the week progresses.

9/5 Day/Swingtrades

2008-09-05T12:07:00.000-07:00

What a pisser. Some days these short-term timeframes work against you. I should have anticipated the sell-off this morning with looser stops. Instead, I got stopped out of my reversal plays which eventually recovered the rest of the day. It would have been an easier day had I just held these positions...along with ICE from yesterday. Today's action was bullish and if we get some decent news on FNM/FRE over the weekend, the financials may push the market up a bit. That should provide some good low-risk set-ups to initiate short/put positions heading into October earnings.

POT - Stopped out @ 151.00, flat
DO - Stopped out @ 104.00, Profit - $1.00
CLR - Stopped out @ 41.00, Loss - $1.00

On the other hand, I caught a nice move on BIDU and MOS.

MOS - Trader Sloth pointed out the bull flag. I thought POT/CF were stronger but it was easier to manage the risk on MOS. Despite the late day strength, I sold the entire position going into the weekend. Profit - $2.00 on calls.

BIDU - I picked up some BIDU calls as the market strengthened up and it broke 268.00. I sold 1/2 at it tagged the 20-SMA (see 30-min chart) for $6.00 profit on calls.

I'm swinging BIDU, WM, ABK and UNG into next week. Have a great weekend!

9/4 Links

2008-09-04T17:03:00.000-07:00

How about this for red:

http://finviz.com/map.ashx?t=sec

Here's a link to Dryship's market report on tanker rates:

http://www.dryships.com/index.cfm?get=report

The Baltic Dry Index is now 50% below the May/June high. Need more proof of a global slowdown?

Time to fade the rallies again and swing the short positions...which I should have done starting Tuesday.

9/4 Day/Swingtrades

2008-09-04T13:17:00.000-07:00

Nice bloodbath in the streets today. I stayed with tech and pulled the trigger on BIDU & GOOG.

BIDU - Nice downtrend the last few days. I sold a bit early.
Bought @ 284.00, Pyramid @ 279.80
Sold @ 274.50
Profit - $7.00 on Puts

GOOG - This opened below support at 260.00. I picked up the puts a bit earlier but after tagging the moving averages, it came back down.

Bought @ 460.24

Sold @ 450.50

Profit - $10.00 on Puts

Swings:

VPHM - Stopped out for $0.30 loss on Sep 15 Calls

ICE - Sold @ 93.50, Profit - $2.00 on calls

ABK - still holding

WM - still holding

CLR - picked up a few calls @ 41.87 as it bounced off support around 41.00

DO - picked up a few calls @ 102.88 as it traded back above the moving averages on the 30-min chart

POT - picked up a few calls @ 150.22...looks to be reversing on 30-min chart.

UNG - picked up a few calls @ 33.84 as it showed strength late in the day.

9/3 Day/Swingtrades

2008-09-03T12:40:00.000-07:00

It's been awhile since I froze up on a trade. I was all set-up to pick up puts on the ferts but got too distracted with all the green (I had a few financials and tech) on my screen. I need to do a better job of reshuffling my watchlist to make sure I seize these opportunities as they don't come that often. On the bright side, my positions held up pretty well.

WM - Still holding

VPHM - Still holding but losing patience

ICE - Sold the Sep 95 Calls for $0.30 loss and moved into Sep 70 Calls. With 3 weeks to expiration, I want to see more of a 1-to-1 movement. So far this has been the better play as I'm up $1.00 on the calls.

ABK - Nice pop today. I took some profits off the table.

SPWR - Whoops, forgot to mention this one. Despite my plan to exit at the open when it gappedd up, I ended up selling for a $0.50 loss on the calls.

9/1 Day/Swingtrades

2008-09-02T14:43:00.000-07:00

Despite all the great set-ups, I was still recovering from the weekend and was too late to a few trades. RIMM and X would have been great shorts as both opened right below support levels and spent the day selling-off. As I mentioned in an earlier post, I was leaning towards a sell-off once the big boys returned but didn't expect it today after the strong opening. We should get some sort of retracement tomorrow as I think the sell-off was overdone and just a lot of short-term profit-taking after the gap open. That said, I'm going to be looking for opportunities to fade any strength as we move deeper into September. While I'm currently swinging some financials on the long side, the weakness in tech and energy/commodities does not leave many sectors for the bulls to hide in. Also, the Vix closed above its declining channel and looks to be headed back up.

ENER - There was some post-earnings support around 74.00. Once it gapped open below this level, I waited for a break of the OR low.
Bought @ 72.07 & 70.77, Puts
Sold @ 69.61 & 70.11
Profit - $1.50 average on Puts

SPWR - I picked up some calls in the last hour. This looks a bit oversold so I'm looking for a bounce back up to $93-94 early tomorrow morning.

Still holding ABK, VPHM, ICE and WM calls.

9/1 Charts

2008-09-02T06:53:00.000-07:00

The markets are up huge this AM so I'll probably wait for some consolidation before jumping in. I'm leaning towards daytrading the weakness in energy/commodities and fading stocks that close the opening gap. Here some charts to keep an eye on:

8/29 Day/swingtrades

2008-08-29T11:27:00.000-07:00

I had planned a light day on Friday with minimal trading. There were a couple daytrade set-ups that looked pretty good, though:

GS - despite the weak market, GS showed strength all day so I picked up some calls as it traded above 163 on higher volume
Profit - $1.20 on Calls

RIMM - With the tech sector weak following Dell's earnings, RIMM opened up below the 125.00 support level. I waited until it broke the opening range low to pick up puts.

Bought @ 123.76, Sep 145 Puts

Sold 1/2 @ 121.64 & 1/2 @ 120.80

Profit - $2.50 on Puts

8/28 Day/swingtrades

2008-08-28T14:58:00.000-07:00

I'm not sure what to make of this rally with the volume tapering off going into the weekend. I started a couple positions but will probably keep it light with the long-weekend. My guess is we hold the gains and maybe even tack on a little more before the institutions sell-off next week.

POT - I bought POT as it crossed over the moving averages and closed out the position today as the opening range could not hold.
Bought @ 178.90
Sold @ 182.90 & 179.70
Profit - $2.40 on Calls

HES - I bought HES as it consolidated at the 105 level and sold yesterday and today on the opening strength.

Bought @ 105.70

Sold @ 109.02 & 108.20

Profit - $2.90 on Calls

X - I bought X as it crossed over the moving averages and sold today as oil started selling off.

Bought @ 128.90

Sold @ 133.45

Profit - 4.55 on shares

ICE - looks to be breaking out of the double-bottom channel. I picked up some Sep 95 Calls.

ABK & WM - I should have gone with any of these below instead of WM last month. Hindsight is always 20/20...and also painful. In any case, I picked up ABK (Sep 7.5 Calls) on the late day strength and WM (Sep 4 Calls) on a potential triple-bottom on the daily. I also daytraded MBI but only eeked out $0.10 despite the late-day strength.

VPHM - Stop @ 13.80

8/27 Day/Swingtrades

2008-08-27T20:00:00.000-07:00

ENER - daytraded on break of 79.00, $0.40 loss on shares

GOOG - daytraded on break of 470.00, $1.50 profit on shares

Those overnights opened up pretty well:

HES - sold half, $3.30 profit on calls

POT - sold half, $4.00 profit on calls

X - still holding

VPHM - still holding

8/26 Day/Swingtrades

2008-08-26T20:05:00.000-07:00

This market is doing a good job of eating up my profits:

MCD - Stopped out in the AM

Loss - $1.40 on Calls

SPWR - Stopped out flat on remaining position in the AM

VPHM - Moving Stop to 13.80

I also picked up some HES (energy strength), X (double-bottom?) and POT (NR7 on daily, CF strength) calls. Given the trading environment, I'll probably have to close those out in the AM.

8/25 Day/Swingtrades

2008-08-25T14:50:00.002-07:00

The weak market stopped me out of a few positions, today:

GS - I'm glad I took profits on last Friday's daytrade as I got stopped out of the remaining position.
Bought @ 156.50, Sep 120 Calls
Sold @ 156.71
Loss - $0.15 on calls

AMZN - On the other hand, I should have taken profits here last Friday.
Bought @ 83.26, Sep 65 Calls
Sold @ 83.36
Loss - $0.45 on calls

SPWR - With FSLR tanking at the open, I lifted my stop shortly after the open to put a limit order to sell but didn't get filled. Instead, I ended up adding a few calls @ 92.73 towards the end of the day.
Stop @ 91.90

MCD - still holding

VPHM - still holding