AJ

Buy to Close 1 VIX Jun 30 Put @ 0.85 (Bought @ 2.30)

2009-06-15T15:20:00.002-05:00

Profit + $145

I decided to close this position towards the end of the day, since I feel we might have a bounce tomorrow and the VIX could fall down.

Sell to Open 1 VIX Jun 30 Put @ 2.30

2009-05-27T13:16:00.002-05:00

VIX looks like it could have support around the 30 area.

Buy to Close 1 RIMM Jun 70 Put @ 5.40 (Sold @ 6.60)

2009-05-14T21:53:00.002-05:00

Profit +120

I'm seeing resistance around the 72 area and it looks to me that it is overbought. I decided to take profits on it.

Sell to Open 1 RIMM Jun 70 Put @ 6.60

2009-05-13T14:25:00.002-05:00

RIMM looks a little oversold to me here. It also looks like it's close to some support around the 69.50 area.

I'll put in a stop loss below 67.50ish area.

Buy to Close 1 GLD May 85 Put @ 0.70 (Sold @ 2.40)

2009-04-29T13:35:00.002-05:00

Profit +170

Put in a mental stop loss if it went below 88, which it did.

Sell to Open 1 GLD May 85 Put @ 2.40

2009-04-17T09:56:00.002-05:00

Possible support at 85. I'll keep an eye on this though, because if the support doesn't hold, it could go all the way to 80.

Buy to Close 1 FAZ Apr 20 Put @ 4.00 (Sold @ 4.90)

2009-04-01T18:36:00.003-05:00

Profit +90

Blah.. was hoping/expecting to make more on this trade. I closed it ahead of the MTM decision. If the market rallies on that news, then FAZ could take a big hit. Just trying to play it safe.

Sell to Open 1 FAZ Apr 20 Put @ 4.90

2009-03-25T12:11:00.002-05:00

Sold a naked put on FAZ. This is a risky play since FAZ has the potential to make 40% moves in a day. But the premium was pretty good and we could get a bounce from here.

Financial Visualizations

2009-03-17T19:46:00.002-05:00

I came across this site today. It seems pretty cool. Sort of like a market dashboard. The picture on the right hand side gives you a color coded sectorwise map. You can also change the map to show ETFs etc. It also has a screener feature which I haven't tried as yet. But if anyone tries it out and finds it useful, let me know!

Buy to Close - 1 TGT 30 Feb Put @ 1.20 (Sold @ 1.92)

2009-02-05T01:01:00.003-05:00

Profit + $72

My target on this was 32 - 32.50. Didn't think it would hit it so quickly. Closed it as it went below 32.

Sell to Open - 1 TGT Feb 30 Put @ 1.92

2009-02-02T15:59:00.004-05:00

TGT has found support at 30 before. It also looks a little oversold. Sold a naked put at these levels.

Buy to Close - 1 Feb 30 Put @ 2.95 (Sold @ 4.10)

2009-01-20T13:18:00.002-05:00

Profit +$115

I decided to take profits on this one. I'm not sure which way the market is headed.

Sell to Open - 1 Feb 30 Put @ 4.10

2009-01-17T12:12:00.002-05:00

I sold a put on X when it broke below $30. X as well as the market in general was oversold and was due for a bounce.

Assigned 100 DIG @ 29

2009-01-17T12:08:00.004-05:00

Paper Loss of around -$50 ($29 strike - $1.30 premium = $27.70 cost basis)

DIG closed below my strike of $29. I let it get assigned, as I feel it has a chance of testing $30 again.

Before the Open

2009-01-13T23:05:00.002-05:00

I found a pretty good site that gives useful information before the market opens. Here's the link. It could give you an idea of which stocks to concentrate on.

Sell to Open - 1 DIG 29 Put @ 1.30

2009-01-09T14:32:00.001-05:00

Oil looks a little oversold here. DIG has had good support around the 30 area.

Buy to Close - 1 DUG Jan 22 Put @ 0.90 (Sold @ 1.80)

2009-01-07T11:53:00.003-05:00

Profit + $90

The Market's getting tricky again, although it's overbought, it's somehow hanging in there. I decided to take profits on this.

Sell to Open - 1 DUG Jan 22 Put @ 1.80

2009-01-06T22:48:00.002-05:00

Sold a put on DUG. Energy stocks look a little overbought to me here. I'll look to cover if DUG breaks below 20.

Buy to Close - 1 USO 30 Jan Put @ 0.45 (Sold @ 2.70)

2009-01-05T19:52:00.004-05:00

Profit + $225

Oil has had a good run the past few weeks. Locked in my profits on this one.

One thing I've realized selling naked puts is to take profits when you've already made 75-80% on the trade. If you try to squeeze out the extra bit of profits in this kind of a trade, it could backfire in your face. It doesn't take much time for options these days to go right back in the money.

Buy to Close - 1 RIMM 40 Jan Put @ 0.72 (Sold @ 2.83)

2009-01-05T19:45:00.003-05:00

Profit + $211

I decided to take profits on this one. I put in a tight stop intra-day and it got hit. Everything just looks so overbought, and I wanted to protect my profits on this one.

Happy New Year!

2009-01-04T19:38:00.003-05:00

Happy New Year folks! I hope this year is better for the stock market than the previous year.

I apologize for not blogging recently. It was partly due to a few changes in my personal life, and partly due to the fact that I didn't trade options a whole lot due to the extreme volatility. I'm hoping for things to settle down a little bit in 2009.

I was thinking about a few New Year's resolutions I made last year, especially the one in which I would like to try out a few other options strategies. Well I did try out a few Call/Put spread trades and a few Naked Put trades and they did work out well for me. I would like to thank "Options for Rookies" for this. Selling options will generally get you more winning trades although the returns might not be as much as when you buy options.

I currently have 2 option trades open.

I Sold to Open 1 RIMM Jan 40 Put (Naked Put) @ 2.83
- I opened this position when RIMM announced their results a few days ago, I opened it when it went a little above 41. It has lost a decent percentage based on time alone.

I Sold to Open 1 USO Jan 30 Put (Naked Put) @ 2.70
- Oil looked very oversold to me. I sold this put when USO was around 30.

The market looks very overbought at these levels. Most of the stocks and indexes look like they're near resistance levels. I'll look to close these positions if the rally looks like it is stalling.

All the best to all!

Sell to Close - 1 POT 80 Nov Call @ 11

2008-11-03T20:12:00.001-05:00

This wasn't a very smart trade... I'm just glad to break-even on this. I should stick to selling options instead.

Buy to Open - 1 POT 80 Nov Call @ 11

2008-10-20T18:57:00.001-05:00

This could be strong above 80. I usually don't like holding options overnight these days, so lets see how this works out.

2 DIA Sept 115 Calls - Expired Worthless (-$102)

2008-10-06T18:12:00.001-05:00

Oh well, that gamble didn't work out...

Buy to Open - 2 DIA Sept 115 Calls @ 0.51 each

2008-09-23T20:14:00.003-05:00

This is a very very very speculative play. I'm just thinking that if the bailout plan is well received, the market will rally hard. I'm prepared to lose this entire premium if it doesn't pan out.

A few points on Selling Naked Puts

2008-09-21T18:36:00.003-05:00

Here are a few things I realized selling Naked Puts...

1. Try to cover the position when your profits reach a certain point. There were multiple times when I could have closed these positions a long time before the expiration for a 50-90% gain, but I wanted to collect the entire premium. Holding a put on SKF during one of the most volatile week for financials on Wall Street was nerve-wracking.
2. Selling way out of money options don't lose value that quickly (at least when the stocks are volatile). So I'll need to sell something closer to the money.

Buy to Close - 1 LVS 35 Sep Put @ 0.05 (Sold @ 1.00)

2008-09-19T19:01:00.003-05:00

Bought this one back for 5 cents. Although it expired worthless towards the end of the day, I decided to cover it in the middle of the day due to the high volatility in the markets.

Buy to Close - 1 SKF 105 Sep Put @ 0.25 (Sold @ 3.10)

2008-09-18T09:32:00.002-05:00

Damn this one was a tough one to hold. Decided to close it a little early, as it can move 20-30 dollars in a heartbeat. Might talk more about this over the weekend.

Still holding onto the LVS naked put. Not sure what I'll be doing with it though.

Options for Rookies

2008-08-30T14:13:00.002-05:00

This is very good site for Option strategies. Check it out.

Sell to Open - 1 SKF 105 Sep Put @ 3.10

2008-08-28T17:41:00.002-05:00

SKF usually gets support around this area. The premiums are pretty large, so decided to sell a put here.

Sell to Open - 1 LVS 35 Sep Put @ 1.00

2008-08-19T11:22:00.002-05:00

LVS has fallen from nearly 60 to 45 in a past 3 days. I'm counting on an oversold bounce off of these levels.

Naked Put Selling (Sold 2 GRMN 35 Puts @ 0.70 each)

2008-08-16T13:48:00.004-05:00

The past few months have been tough when it comes to trading... trading options more so. The market is just too volatile and can be dangerous when you're buying calls and puts, since you could lose a lot of money in time premium.

I decided to try out a few other option strategies, I'll talk about one of them - Naked Put Selling. You can find some information on this strategy here.

Unlike the call and put buying strategies, where the maximum money you can lose is the premium you pay for the options, in this strategy, the losses can be very large if you're not careful. But the beauty of this strategy, and I guess any strategy that involves selling options, you can still make money, even if you're slightly wrong with predicting the direction of the stock. This was the case with my first trade using this strategy, the profits weren't huge (and in general the profits won't be as big with selling options than with buying options), but it was definitely fulfilling.

This trade wasn't perfect or even close to it, but I'm hoping to refine my entry as I place more trades. After GRMN announced their results, the stock took a beating. It was already down 13-14% and I thought the downside was limited and also since the move was so quick, I felt the option premiums might be the highest around that time. So instead of buying a call, I decided to sell a put. I sold 2 Aug 35 puts @ 0.70 each (the stock was a little above 39 at that time), thinking that GRMN won't go down that far. But I was wrong :) At one time it went below 34 and I was getting ready to close at least one position, but since there was some time premium still left on it, I decided to hold on and sell maybe after a good bounce. I was lucky enough to get that bounce and the option premium started falling. At one time I could have covered it when the premium went to 0.05, but I didn't, which could've been dangerous, since the stock fell down hard once again. I'll remember to close early the next time and not let a profit turn into a loss in order to get the last few pennies.

I like this strategy, since it makes you identify the support areas and if those areas are strong enough, you can sell a put below these areas. This is a good strategy for long term investors as well, since instead of buying stocks right away, you can sell a put below the price it is right now, and if the strike price gets hit at expiration, the investor buys the stock at lower price and keeps the premium, but if the strike price does not get hit, the investor keeps the premium. There are obviously huge risks involved with this strategy, so be warned.

Disclaimer: I've described this strategy for general informational purposes only. My opinions do not constitute a recommendation to buy or sell any securities and should not be considered as investment advice.

Sell 1 X June 2008 Call @ 9.10 (profit of $80)

2008-05-14T17:04:00.002-05:00

My exit on this wasn't all that great. I sold it in the morning, after seeing a lot of volatility. But after looking at the closing price, I'm not complaining.

Buy 1 X Jun 2008 Call @ 8.30

2008-05-13T18:24:00.002-05:00

Bought this on a break of 172.50. I had put an alert on this price a few days ago, it got triggered today. I would've liked to see better volume on this. It's been struggling to overcome this area of resistance. If it gets overcomes this resistance, it could fly.

Some thoughts...

2008-05-10T13:07:00.004-05:00

It's been a while since I last posted, and I'm sure I've already lost the very few readers that I had, but oh well...

The market's been acting well the past few weeks, and people are wondering whether this is a bull rally in a bear market or if this actually is the real thing. As always, no one knows.

When I began to write this post, I thought I'd have a lot of good charts, but could only come up with one. I took a look at some oil, steel, coal related stocks, most of them are making all time highs, so they could be due for a pullback. But I've put some alerts in my trading account, since I feel that if they continue climbing, a short squeeze will ensue. I've always visited Tim's site, since you can learn a lot of TA stuff from there, but this post, in which he gives his readers an idea of what his stops are on some of his positions, will give you a good idea of where the shorts will start covering their positions. I've got most of these stocks on my watchlist.

Here's one chart that I found interesting. IBM, this looks that it could break out above 125.

Good luck with your trades, and feel free to share your ideas.

A few stocks..

2008-03-30T15:54:00.002-05:00

I'll be setting these alerts...

Longs:
RRC above 65
SWN above 34
RIO above 35
X above 127.60

Shorts:
ANF below 71.50
DV below 39.50

AAPL

2008-03-26T21:57:00.002-05:00

It looks like it's filled the gap. Short term pullback perhaps?

GS

2008-03-20T22:38:00.003-05:00

GS is usually a pretty good indicator of how the market will behave. So this stock better do well if the market wants to go higher.
Its close to the 180-181 area, which could be potential resistance. It needs to get above this level and hold it as support. That should be pretty bullish.

A few charts

2008-02-24T21:17:00.004-05:00

We'll see if the bullish late day push that occurred on Friday will spill over this week. It's still tough to judge direction here. SPY hit 137 a couple of days ago, but was quickly sold. I mentioned last week that we need to get above 137 to set a bullish tone, but that did not happen.

Here are a few charts I'll be watching this week...

SID

2008-02-19T19:23:00.003-05:00

I got rid of my position in SID @ around 38 when the market started going down in the afternoon. I wanted to lock in the gains before they vanished, like they seem to be doing so often these days.
In my previous post I mentioned that I wanted to see a high volume day in SID, which happened today. I'll keep a watch on this stock, if the market holds up, this should do well.

Still no clear direction

2008-02-16T15:57:00.007-05:00

Well the IBD 100 list has highlighted a few stocks that could be in a buyable range. But they're still very cautious about the market.

The market still could go either way. I'm still finding it difficult to hold short term trades for more than a day. The moves are too volatile for me to handle.

Here are a few charts that I'll be watching... US Markets will be closed on Monday for President's Day.

Tough trading

2008-02-09T16:52:00.000-05:00

Pretty tough to trade out there. Very volatile. Since YHOO will be rejecting MSFT's bid, we'll see what happens to the stock on Monday. It might drag the market down if it goes back down to it's previous levels.

Here are a few picks, haven't gone through a lot of charts. Tough to judge direction these days.

A few charts

2008-02-03T23:01:00.000-05:00

So the IBD 100 list didn't have any buy recommendations. I haven't had a chance to go through the list or too many charts for that matter. I took a look at a few, I might be watching these next week...

A few charts for next week

2008-01-26T12:59:00.000-05:00

It's still a pretty tricky environment to trade. When things look like the market will go up, it goes down and vice versa. Most of the charts that I'm seeing look like they're running into resistance, which were prior support areas. Here are a few charts that I felt could be worth looking into...

Doom and Gloom

2008-01-21T22:07:00.000-05:00

Tomorrow's going to be a fun day ...NOT. I'm really not sure what the game plan should be for tomorrow. It won't be wise to buy puts early in the morning, since the premiums would be through the roof, and buying calls would be akin to catching sharp falling knives.

Trade well, be safe.

The straw that broke the camel's back...

2008-01-15T20:13:00.000-05:00

Dow was trying to get some sort of support around the 12500 area. But INTC screwed things up pretty badly after hours. Not good.
A lot of stocks have broken support once again and the news just keeps getting worse. JPM reports tomorrow morning, not expecting anything great from them either. Dow, 12000 or bust?

Random Charts

2008-01-12T17:57:00.000-05:00

Here are a few charts of stocks I usually follow. Some of them are running into resistance and some of them close to support. Most of the charts are bearish, if not all of them. The market just can't seem to get a foothold. Whenever there's a hint of a rally, a company usually speaks up after hours with some 'wonderful' credit crisis news, and the market goes back in the crapper the next day.

I haven't taken a look at the IBD 100 list, no sense wasting too much time on it this week.

Here are the charts. Comments welcome. Please share ideas for other interesting charts.

Sell - 2 RIMM Feb 105 Puts @ 13.15avg (Bought @ 10.50avg)

2008-01-09T20:31:00.000-05:00

One more thing I need to remember is to get rid of options early on in the trading day. Option premiums are usually high at that time. I got stopped out of this position mid-morning. Saw this option going all the way to 16.50 (Damn). It did close below my selling point, so can't complain a whole lot.

Short term bottom in the market perhaps?

Buy - 1 RIMM Feb 105 Put @ 10.00

2008-01-08T20:33:00.000-05:00

Added one more to my current position. Avg price 2 @ 10.50.

Buy - 1 RIMM Feb 105 Put @ 11.00

2008-01-07T20:27:00.000-05:00

Bought this on a break of 100 mid-afternoon. Although it fell down soon after, the late day rally brought it back up to the same level as when I purchased it.

Happy New Year...

2008-01-05T14:22:00.000-05:00

Nice way for the market to wish us a Happy New Year huh? Not sure if a lot of people saw this coming (maybe this guy with this time machine did). We'll have to wait and see what happens next.

So it's that time of the year, when people make resolutions, look back at how the last year went. Just wanted to post a few thoughts myself.

2007 was a flat year for me. I think I finished nearly at the same point as I started. Not good... It was a good learning experience though, and hopefully the lessons learnt will enable me to make some money in the future.

I started this blog, posted my trades, posted some lessons learnt in the hope that I won't repeat my mistakes again. I have tried hard to stick to them, but sometimes the gambler in me prevents me from doing so. Going forward I'll try to do a better job of this.

A few things I plan to practice/pay attention to this year-

1. Respect Stop Loss
How many times have we taken profits quickly, but let our losers bleed us dry? I'm sure many many times. When a trade goes against us, we try to wait it out, thinking it will go our way again. Most of the time it just keeps on going the other way. That's when a small loss starts becoming bigger and if you're holding options you tend to say, 'Well since the position is already down so much, I'll wait it out some more.'. That's when your option will expire worthless.
This year I've let way fewer options expire worthless than the previous years. I'll try to bring that number down to 0.

2. Be Patient
Sometimes, when traders look at charts and spot a pattern, they'll get
into the trade before the pattern has a chance to finish itself. This could be disastrous. Wait for the pattern to finish, then decide which side of the trade to take. BIDU for example, a few months ago, it looked like it was forming somewhat of a head and shoulders pattern, and on a break of around the 300 area, it would fall straight through. I'm sure many people shorted the stock in anticipation. But it bounced right off of that level and went back over 400.
One should identify a good support and resistance area, and wait for the stock to
reach that before making a decision. These areas are like magnets, stocks will generally test them before making their moves.
It is very possible that inspite of waiting for the stock to do it's things around
these areas, you would still take the wrong side of the trade. In that case, follow point number 1 that I made above.

3. Learn what make options tick
Although I've been trading options for some time now, I don't think I've ever sat back and thought what makes them tick, what are the undercurrents that people usually don't see from the top.
A few days ago when I bought a put on GS when it was trading at 215, it went down to 210 and after about 4 days it came back up to 215. In the meantime, my option lost about 80 dollars, even though it was at the same spot as when I bought i. Although I knew options will lose money as time passes, I didn't look to see how much it would be losing. I then looked at theta, which tells you how much value the option loses with the passage of time. It was over 20 dollars. So I was losing 20 dollars each day just by holding on to it. So after that day, I'm taking a look at the theta as well before making my decision (I've always looked at the IV and delta before).
This year, I'll also try to look at trading spreads etc to possibly lower my risk. Also, I'll be looking into being an options seller more than a buyer. If 70% of the options expire worthless, it's better being on the side of the trade that has a higher probability of success. As an options seller, time is your friend.

I guess that's it for now, I'm sure there are many more things that I would like to do which I haven't mentioned, but these are the more important ones.

I would like to thank all those who visit my blog and those who post comments. That's what keeps me going. Going forward, I would really appreciate it if more of you could post your comments. I might not know the answers to your questions, but by doing so all of us could learn together.

JCP

2008-01-03T19:43:00.000-05:00

While retail in general looks weak, JCP looks like it's ready to break down.

Sell - 1 GS Jan 210 Put @ 7.50 (Bought @ 5.50)

2008-01-02T19:38:00.000-05:00

Sold this when the market looked like it was reversing in the afternoon. But it went down after that. Oh well...

Sell - 1 AAPL Jan 195 Put @ 5.80 (Bought @ 6.30)

2008-01-02T19:35:00.000-05:00

I closed this a few days ago when AAPL went above 200. Didn't want to risk it. But after looking at the action the past few days.. bad decision.

Buy - 1 GS Jan 210 Put @ 5.50

2007-12-27T19:56:00.000-05:00

GS usually finds support/resistance at 215. After that level was broken, it wasn't able to get above that. My initial target is 210. Stop loss above 215.

Buy - 1 AAPL Jan 195 Put @ 6.30

2007-12-27T19:49:00.000-05:00

AAPL looked a little overbought. My short term target on AAPL is 195.

Some charts...

2007-12-22T21:19:00.001-05:00

A few charts from the IBD 100 list. Let me know your thoughts...

A few charts

2007-12-15T16:41:00.001-05:00

I'm still not sure which way the market is heading. There are a few big names reporting this week which could give this market some direction...

Here are a few charts, most of them from the IBD 100 list.

LIFC could be getting support around the 44ish area.

I don't follow IRM, but j.M, a regular reader, does. It could be getting some support around the 36ish area. If it bounces from here and breaks 38ish, it might be a cup and handle.

POT could be getting some support around the 124 area. I'll try to be patient with this one, maybe let it base a little here. If it breaks this area of support, it could head much lower.

Sell - 1 GS Jan Call @ 10.20 (Bought @ 9.00)

2007-12-14T17:15:00.000-05:00

GS has found support/resistance at the 215 level many times before. Today was no different. It tagged 215 today and moved down the rest of the day. Unfortunately I wasn't at my desk most of the day, otherwise I would have closed it much earlier. Anyway, got out of this after I felt that the market looked like it was headed lower.

Buy - 1 GS Jan Call @ 9.00

2007-12-13T20:25:00.000-05:00

Has anyone bought a Put by mistake instead of buying a Call (or vice versa)? Well it happened to me today... I thought I was buying a GS Call, but I actually bought a Put. I was surprised to see the price of my position actually going down when GS started climbing... It took me a few seconds to realize what I had just did. Anyway, I held on to it, which was a good thing, as it started falling down soon after. I got out of it with a profit of $80.
I bought this call soon after selling my Put. It looked like it was basing at 108, but wasn't so. It fell to about 105. Anyway, it did climb back up towards the end of the day, good thing.

GS reports on the 18th... any chance it will ramp up going into the earnings?

A few charts

2007-12-09T18:53:00.000-05:00

A few charts worth looking at. All long recommendations. But the Fed decision will obviously be something to watch out for.

Sell - 2 AZO Dec 120 Put @ 0.80 (Bought @ 1.80)

2007-12-06T20:10:00.000-05:00

Shouldn't fight the trend...

Buy - 2 AZO Dec 120 Put @ 1.80

2007-12-04T21:20:00.000-05:00

Looked to me like it was headed into resistance around 125. But once that was taken out, a short squeeeeeze took over. Not a smart play. Not a good idea to stand in front of a runaway train.

Sell - 2 POT Dec 125 Call @ 6.30 (Bought @ 5.95 avg)

2007-12-04T21:17:00.000-05:00

Sold this around 125. It was trading in a range, with 125 being resistance. The market was also showing some weakness during this time.

Buy - 1 POT Dec 125 Call @ 5.50

2007-12-04T21:14:00.000-05:00

Bought this when POT fell from 126 to 123 in a few minutes. I was anticipating an oversold bounce.

Buy - 1 POT Dec 125 Call @ 6.40

2007-12-03T18:35:00.000-05:00

Bought this on a bounce off of support @ 124. It kept oscillating around this level throughout the day though. I'll look to keep a tight stop on this one, this stock has the potential of going out of hand very quickly.

Sell - 1 RIMM Dec 110 Put @ 10.15 (Bought @ 7.00)

2007-12-03T18:27:00.000-05:00

Sold this after it bounced off of support at 105. It weakened in the afternoon though and is currently below 105. If the market weakens further, this could easily see 100.

Bernanke Hints of Further Rate Cuts

2007-11-29T22:57:00.000-05:00

Bernanke seems to be hell bent on kicking the bears in the nuts. Tomorrow could be a strong day. We'll have to see how DELL's earnings affect the day's proceedings.
Today's day is what the markets needed, a long deserved rest. We're so used to 3 digit moves these days, that today might have seemed like a boring day to most. It's still very volatile out there, so be careful.

Sell - 1 SHLD Dec 100 Put @ 6.00 (Bought @ 3.00)

2007-11-29T22:48:00.000-05:00

Ignorance is bliss! I had no idea that SHLD was reporting today, otherwise I might not have even taken this trade. I was thinking of closing it yesterday, good thing I decided not to.
Closed this a little after the open. Some thing that I've realized trading big earnings based moves is to get rid of options at the beginning of the day, that's when the premiums are usually the highest.

As a side note, I bought this put option @ 3.00 when the stock was trading at around 111. Now it's at 104 and the option is still selling for only 3.00. Goes to show what an IV drop can do to an option price.

Buy - 1 SHLD Dec 100 Put @ 3.00

2007-11-27T22:27:00.000-05:00

This one's extremely speculative...

Buy - 1 RIMM Dec 110 Put @ 7.00

2007-11-27T22:25:00.000-05:00

Not too sure about this one. It looked like it was weakening intra-day, but the late day rally did some damage.

Sell - 1 LEH Dec 60 Put @ 5.10 (Bought @ 4.20)

2007-11-27T22:23:00.000-05:00

Sold this one, but shorted a few shares a little above 60.

Sell - 1 AAPL Dec 170 Put @ 5.60 (Bought @ 5.15)

2007-11-27T22:21:00.001-05:00

Got stopped out in the morning. Had I held on to it a little while longer, could've had a pretty nice profit. Coulda woulda shoulda..

Buy - 1 LEH Dec 60 Put @ 4.20

2007-11-26T19:30:00.000-05:00

Bought this on a break of 60. Initial target is around 56. I thought I put in an order to buy 2, unluckily it turned out to be only 1. I might have been better of just shorting the stock instead. But it is what it is...

Buy - 1 AAPL Dec 170 Put @ 5.15

2007-11-26T19:14:00.000-05:00

AAPL looked overbought to me. I waited for it to reach the mid 177 area, which I thought might act as resistance. I bought it after it fell below 176.50. I was monitoring it closely, and might have closed it had it taken out the highs. But it never came back up to even test the point at which I bought it.

My first target is 170. I'll also be putting a mental stop on this if it decides to take off tomorrow. On a daily chart, it might have formed a shooting star, which is bearish.

Todays action

2007-11-14T22:47:00.000-05:00

The last hour or so wasn't very kind to the bulls. Make sure you have a list of stocks to short or buy puts on close at hand... you could be using it very soon.

Out of the woods?

2007-11-13T20:57:00.000-05:00

The past few days, when my portfolio was getting ravaged by the bears, how I wished that my portfolio contained a few short positions. I was 100% long. A few shorts would have definitely eased the pain. I read a few articles which mentioned a balanced portfolio should contain 70/30 or 80/20 long / short positions... i.e. 70% long and 30% short or 80% long and 20% short. Well.. the market has given us a chance to do so.

It was a nice day for the bulls. I did recover some of the losses I've had the past few days, but not nearly enough. Are we out of the woods yet? Perhaps not. The market's fallen down so much so quickly that it's created a lot of resistance levels up ahead.

I had mentioned the 134 level in the DIA in a prior post as a strong support area which was broken. This could now end up being a resistance level.

SPY also could be running into resistance.. perhaps around the 149 area.

I would still be careful in this environment. I'll be looking for some low risk short/put entries at possible resistance levels to balance my portfolio.

Trade well!

Sinking Dollar

2007-11-10T16:04:00.000-05:00

I read an article on CNN Money, in which they have an interesting chart. If history repeats itself, it won't be good for the market at all.

The markets fallen down quickly and on heavy volume. In doing so, it's formed a lot of resistance levels up above. So trying to reclaim these levels could be a tough task.

The Friday close was disheartening for the bulls. I read an interesting post on another blog in which that person mentioned that if the market closes weak on Friday, it usually opens weak on Monday as well. I've seen that happening a few times before, we'll see if that happens this time as well.

I'm expecting (could be read as "hoping") a short term bounce. But I feel that this bounce will be used by people to offload some long positions and possibly load up on shorts.

It's a scary market out there, so be careful.

POT

2007-11-06T22:25:00.000-05:00

I traded POT today, bought one option mid-afternoon, sold it towards the end of the day. I'm still cautious with the current market so didn't want to hold it overnight. One thing I liked about this trade was that my bid was matched and so was my ask. Usually it happens the other way around for me. So at least I was able to make money off of the spread... which usually for these options could be around 50 bucks.
I bought this for 9.40, sold for 10.40.

POT still looks to be consolidating the huge move it made a few days ago. This could break out above 124.

DIA - Watch the 134 level

2007-11-01T22:18:00.000-05:00

What a difference a day makes. Just when things were going well, 14000 was within easy reach... now we're just looking for some sort of a support. The 134 level could be very important for DIA. If it can't hold that level as support, we could easily see 13000.

Be careful out there...

CTRP

2007-10-31T21:09:00.000-05:00

So now that the Fed decision is over, we can start looking at some options again. CTRP looks interesting. It was able to hold the 54ish area as support, which it previously found as resistance. IBD always has good things to say about it. Earnings are in a week though, so be careful.

Buy - 2 DIA Dec 140 Call @ 2.46 avg

2007-10-27T13:05:00.001-05:00

If November and December are strong months, this position could do well. Bought 2 options over the past couple of days. I guess the fed meeting could determine the fate of this position.

Sell - 1 POT Nov 100 Call @ 18.50 (Bought @ 14.40)

2007-10-27T12:40:00.000-05:00

Finally got rid of this one. I had 2 positions on this, one which I sold for a loss, this one for a gain. The average gain was about 70 bucks, after commissions it was around 40. Was this gain worth the pain and agony? Neope ... :) Did it make me wiser? Hopefully.
Few things I learnt from this-
1. Don't hold options through earnings, unless it's an earnings specific play.
2. Don't buy deep in the money options on volatile stocks, especially if the stock price is in triple digits.

POT

2007-10-25T23:00:00.000-05:00

Wow .. what the heck was that .. nearly a 20 dollar intra-day move .. I was lucky I was busy with meetings all morning, else I would've definitely sold in panic. I did get out of the meeting for a few minutes to check up on this position .. Down 1K at the open. Not a good feeling. Just walked away from my computer.
I stopped back again in the afternoon put a mental stop below 104, was getting ready to sell the position. Just a minute or so after, it had one of the most phenomenal runs I've ever seen. Still can't figure out the reason, but once it started, a short squeeze must've taken over. Volume on the upside was huge. At one time I remember seeing the spread 12.50/15.00.. scary. I'm still holding onto the position.

I'm not out of the woods yet, but will try to be more careful and not let the position run away from me. One lesson I've learnt though, never trade straight calls or puts on something this volatile... the heart ache is just not worth it.

The past few days...

2007-10-24T21:04:00.000-05:00

I haven't traded any options. It's too volatile out there for my taste. I'm not a day trader, and the past few days have been a day trader's delight. I'm mainly concentrating on building a strong stock portfolio. I feel that's pretty important as your stock position should be making money for you on the side without you having to touch it very often. But recently I found myself concentrating more on my options trading rather than my stock portfolio.
There were a few stocks in my portfolio that weren't moving much, if not at all, so I sold a few names, started buying stronger ones. Once I'm happy with my stock portfolio, I will concentrate on my 'fun' money....for options.
POT reports tomorrow... if they screw up, I'll finally cut it loose for a sizeable loss. That should make me look for some other names.
It's still very volatile out there, so trade carefully!

Buy - 1 OIH Nov 210 Call @ 3.10

2007-10-18T23:23:00.000-05:00

I'll be building up this position with time. I would have preferred Dec expiration, but there weren't any.

Update: Since it moved down so quickly, I might just be throwing more money in a losing position if I add on to this position. I'll just hold this, if I can get my money back, or close to it, I'll be happy.

ROP

2007-10-17T22:05:00.000-05:00

This stock has been trying to break 67 for a while, yesterday it did, but couldn't close above it. Today it finally closed above 67... but it did form a Hanging Man like pattern, so it could pull back, which could be ideal for a lower risk entry point if it finds support around the previous resistance of 67.

Sell - 1 POT Nov 100 Call @ 12.80 (Bought @ 16.20)

2007-10-17T21:45:00.000-05:00

Yep, now I know why I had 'Don't average down' in my rules. It doubles the pain when the stock goes against you. My timing on this trade has been completely off. Right now, IMO, it looks oversold, which would be a good time to add this... but too scared to do it at the moment.
The other thing is options expiration on Friday. This could get pinned to either 105 (ouch) or 110.

Buy - 1 POT Nov 100 Call @ 14.40

2007-10-16T21:40:00.000-05:00

I didn't time this as well as I would have liked. I bought it, what looked to me, a break of a cup and handle pattern. But it didn't go too far beyond that. An ideal entry IMO, would have been close to 110, there was some pretty good intra-day support. I should've been more patient.
So I've broken one of my rules again, never to average down on anything. If it goes down tomorrow, this could really hurt me.

POT reports sometime next week. A run-up into the earnings would be nice :)

HLIT

2007-10-14T12:01:00.000-05:00

I've been holding a very small stock position in HLIT, which I might add to. It looks like it's broken above resistance around the 11 area.

There was an article about this in IBD, which could bring it some visibility.

There was this question ..

IBD: Would you consider being acquired?
Harshman: Our strategy right now is one of independence. That's not to say we wouldn't take any outside offer seriously.

..which made me look at the OBV. It seems to be in an uptrend. "Smart" money accumulating this stock? Time will tell.

Disclosure: Yes, I own this stock.

RIG

2007-10-14T10:43:00.000-05:00

RIG has been forming a nice series of well defined support and resistance levels. Could this pattern continue? Perhaps the next resistance level could be around the 120-121 area, which is the 52 week high.

Buy - 1 POT Nov 100 Call @ 16.20

2007-10-13T17:21:00.000-05:00

Bought this on a breakout of around 113.50 .. but it soon hit a wall at 114. One thing I need to work on is to put in a bid and wait for it to get hit. I usually just match the Ask at the time, and I lose money on the spread itself.
Looking at the POT chart with my bullish goggles on, does that look like a cup and handle ?? This could be strong on a good break of 114.

Today..

2007-10-11T18:40:00.000-05:00

Wow, what a day. I did want to see a pullback, but wasn't expecting the rug to be pulled from under our feet. Anyway, it is what it is.

I had 2 trades, one profit, the other loss. Evened out towards the end of the day. Could have been worse.

Sell - 1 OIH Nov 95 Call @ 12.70 (Bought @ 10.80)

I bought this one a break of 200. I wasn't expecting it to go up too much today, but it did make a pretty decent move up. When the upward trendline was broken, I put an alert if it went below 202.50. Once the alert was triggered, I sold it when the stock went above that level, and became overbought on the 1 minute time-frame.

I made another trade, this was for a loss.
Sell 1 EXM Nov 65 Call @ 8.20 (Bought @ 10)
I bought this on a break of 70. But couldn't hold that level. I had to get out when the market took a turn.

A few thoughts..

2007-10-09T19:10:00.000-05:00

I don't think I've ever felt so bad about a trade as I have about the DRYS positions that I got out of a couple of days ago. It's not that I lost money on it, but because I cut my profits on this big time. Nearly 2.5K worth. Wow, when I put a K in front of it, it looks even bigger. I got shaken out of both my positions a couple of days ago. Sure, you must respect your stop-loss, but I should have gotten out of only 1 position, and kept hold of one. I tried to protect about 250 bucks in profit, but that cost me a lot more. Granted, this stock could have gone down, instead of up, but it doesn't make me feel any better.

On a possibly unrelated note, but mainly because I was so pissed off, I realized that I'm trying to monitor too many stocks. Yesterday, when I was adding some stock alerts in my Ameritrade account, I got a message saying that I couldn't add more as I reached my limit of 80 alerts. 80 alerts ?? What the duce, am I nuts???
I need to concentrate on a few strong stocks, get to know them, know their support, resistance areas and trade accordingly. I've been mainly concentrating on break-outs, but buying on pullbacks could be rewarding as well.
As an example, Madstocks.com (Thanks Ragin') had a post in which he showed some nice charts, and as a quiz, asked people which chart they thought was the best. I posted 'CMI' as my answer. But what did I do with it after that? Not a whole lot, I think I got an alert when it crossed 140 today, but had I studied and monitored the chart properly, I could have made some money on it.

So, a few changes for me going ahead...
1. Choose fundamentally strong, trending stocks. I think I could start from the IBD CANSLIM list. Study the various supports and resistance areas.
2. The watchlist should contain only a handful of stocks. Most traders have a few favorite stocks. I need to find my own favorites.

Trading isn't easy. But if you keep it simple, it should make it a little easier.

If you've made it till here, thanks for listening. Trade sensibly.

Watchlist

2007-10-07T21:15:00.000-05:00

Some charts that look interesting to me ..

MON
This could break out, but they report on Wednesday, so that could nullify the technicals.

INTC
A lot of folks are watching INTC for a break over 26.50. I think it could get a nice pop above that.

OII
This could break out over 78. This one also appears on the IBD 100 list.

BX
Missed the breakout on an inverted H&S pattern. This looks to be heading into resistance around the 30 area. It could be strong above it though.

Some more alerts I'll be setting ..
CHTT above 74
OII above 78
ZOLT above 45.50
INTC above 26.50
NVDA above 38
FXI above 192.05
SNP above 129
AEM above 52.50
FWLT above 143
RIMM above 115
VMW above 92.50
NILE above 96
ROP above 66.75

Sell - 2 DRYS Nov 95 Call @ 12.30, 11.70 (Bought 12.10, 9.00)

2007-10-07T11:28:00.000-05:00

I added to this position on Thursday when it took a dive. I really don't think that was a smart play, since the market could have turned either way on the jobs report the next day. Luckily for me, on this trade, DRYS did go up the next day, so I was able to close it for a small profit.
When I purchased the first option, I mentioned that I would add to it if it went above 100.20, well, I didn't add to my position, but if you look at the chart, it did take off after crossing that point, by about 2 bucks or so. Unfortunately, it came crashing down towards the end of the day, and I closed my position.
DRYS is a very volatile stock, and I sometimes think it's better to hold stocks in it rather than options.

Currently, I'm not holding any option positions, which could be a good thing, since I do a better job looking for good trades, rather than worrying about how my current option positions will do if they go against me.

I'll try to post some charts tonight. The market does look a little overbought, so it could pull back this week. IBD has highlighted a lot of 'buyable' stocks, so that could make things interesting.

Alerts

2007-10-03T00:19:00.001-05:00

Setting Alerts for the following-

CNH above 62
NOV above 75
MA above 155
ISRG above 235
FWLT above 137
CMI above 136.25

Buy - 1 DRYS Nov 95 Call @ 12.10

2007-10-02T20:58:00.000-05:00

This thing better not pull back on me! I might add one more above 100.20ish. Breaking above today's high could take it higher.

Sell - 1 AKAM Nov 45 Put @ 15.80 (Bought @ 14.40)

2007-10-02T20:14:00.000-05:00

Hmm .. short squeeeeeeze.. good thing I respected my stop loss @ 29 on this one.

Sell - 1 GME Oct 45 Call @ 12.20 (Bought @ 7.30)

2007-09-27T19:45:00.000-05:00

Bloody downgrade.