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Intraday/Swing Plays
- Thread starter Seanote
- Start date
It's virtually impossible to put a trailing stop on an option due to the volatility of the bid/ask posts, ecspecially on the SOX. I have a target price on this contract which is much higher than usual due to the index breaking through the 1st and 2nd resistance levels. I do have a stop price set on paper which will require me to work the order since the spread is so wide. I rarely sell to the bid unless I have to get out immediately. Generally I would close the position to lock in a good profit but every now and then I pick my plays that I take with the anticipation of heavy returns along with the understanding that I could give up quite a bit of money at this point.
Check out .SJXDR (590) ....there have been 2 trades today. One 500 lot and one 800 lot....both at or near the ask!! I have the (600) calls...here's a good indication of continued upside short-term. You don't buy 1300 contracts on the SOX without knowing something. Open interest increased as well. That was a $9 million transaction!
Seanote, I have to agree with the use of stops on options. My first experience was with the OEX. I had a stop order at $10. The bid/ask were both above $10. Later in the day the market fell and when the ask price hit $10 my order was triggered. The spread was $1 and I was out at $9. Since then I only use limit orders to enter or exit options.
I really enjoy reading this thread. Thanks for posting your moves. Since you are a swing trader do you do some sort of scan on end of day data (ex TC2000) to get a list of possible candidates? That's what I do, then I look at the intraday chart to look for near term support/resistance and possible entry points.
I really enjoy reading this thread. Thanks for posting your moves. Since you are a swing trader do you do some sort of scan on end of day data (ex TC2000) to get a list of possible candidates? That's what I do, then I look at the intraday chart to look for near term support/resistance and possible entry points.
In regards to scanning for stocks after hours I have a program that looks for the criteria programmed according to my trading strategies. After the stocks populate I then research each one technically and fundamentally during the evening or early morning to narrow down the few I will play. One of the most important attributes to have as a trader is a "feel" for the market.... meaning the ability to access and interpret quality news, being aware of upcoming economic events, following futures, indices, Treasuries, investor sentiment, noticing seasonal market tendencies, ect; Nobody ever knows for sure how and when the market will react but doing your DD on these events can help control and minimize the risks involved in trading.