GOOGL - April17 OTM Calls

OTM-Options

OTM-Options

GOOGL - April17 OTM Calls

90% chance I buy some GOOGL OTM calls this week, probably on Tuesday at about 3:30 PM EST. Similar to this trade: GOOGL - Bought 2 April10 557.50 Calls at $0.50

I might avoid the trade if GOOGL makes any big moves up or down before I enter. I will post when (if) the trade is filled.

RECAP
  • Bullish on the overall US markets.
  • Expect the Nasdaq to break its all time high very soon.
  • Earnings may be a catalyst to get things going.
  • This is a GOOGL pre-earnings trade.
  • GOOGL's weekly options are cheap and it doesn't take much to get a 100% plus increase.
  • Since I'm bullish I will buy the calls.
  • My risk/maximum loss is defined in the debit I pay.

Comments are welcome.

:)
 
OTM-Options... since that's your handle, I'm guessing that you like OTM options... I personally don't care for them. The odds of success are low. So you lose 100% of your bet each week, or perhaps 50% each week if you close early. And every now and then, perhaps, you get a double if you guess right.

I would prefer a credit spread where you have high odds of making something every week. Consistent small/medium trades that you can dial up to more aggressive trades if your system calls for it. I teach classes on this every week and have written a book on it. It makes more sense to me.

I would encourage you to find a technical system that gives your trades an edge. Backtest your system till you find something that works. Trades that begin with, "I feel like this stock might be ready to take off..." are just wild guesses. Not a good plan.

But if you like the thrill of losing money every week, with the chance of a rocket ship, and you can afford it, then have at it. Just recognize that the odds are against you. It's like playing roulette... you might win, and you might win a bundle, but over time, you will always lose.
 
Costs thus far $3.17. Will try to box out if given the opp.

FF, your spec may very well outperform, but this is the way I trade.
 
donnap said:
  • long 2 557.5C @ 1.50
  • short 2 560C @ 1.20
  • R/R 60/440 net of costs
Costs thus far $3.17. Will try to box out if given the opp.
FF, your spec may very well outperform, but this is the way I trade.
More...

I'm not sure what the cost of $3.17 is. I come up with $0.30 x 2 = $0.60.

I don't mind Debit Spreads myself, but I do approach them with caution. A few months ago I had a PLCN Debit Spread go DITM - lots of money was tied up in the short call. I haven't entered one since but I might in the future.



:)
 
Comms at IB 1st 2 contracts @ 1.58 2nd 2 @ 1.59 =3.17.

Comms on exit buy back shorts @ 1.58 sell longs @ .09 (go figure)

Total comms 4.84
 
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