Friday, May 15, 2009

5/15 Day/swingtrades

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:

Thursday, May 14, 2009

5/14 Day/swingtrades

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.

Wednesday, May 13, 2009

5/13 Day/swingtrades

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.

Tuesday, May 12, 2009

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

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.

Monday, May 11, 2009

May 2009 Options Expiration Week

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.

Thursday, May 7, 2009

New Site:

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:

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.

Thursday, April 30, 2009

4/30 - Day/swingtrades - LVS

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.