Monday Open Shopping List

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Equitanious

My overextendometer is telling me to buy the following on Monday at Open...

HSIC Jan 55 call
MMM Jan 85 call
BAC Jan 12.5 call + May 2011 13 call
Apol Jan2012 45 call I already have a Jan 37 call from last Monday.
 
My thinking is this...

I have a model that has historically worked well in predicting 5 to 10 % moves in stock price over a period of a few days to a few weeks.

Clearly options are the most effective tool to take advantage of an anticipated move in a defined (somewhat) period of time.

My analysis of stocks is good. My knowledge of option tactics is not.

What I would like this thread to evolve into is a discussion on the most suitable options to take advantage of what initially are just directional calls on the underlying.

I believe this would be hugely instructional to me and to anyone else following the thread as it would be a real time "learn by doing" process

The weekly close is an important factor in my model so the first hour into Monday open is the only time I open trades.

There appears to be some very knowledgeable option guys here and their input would be most welcome.

Regards to all.
 
if you had a high degree of confidence the underly would advance in price in a relatively short time frame, would you not want to go just or more otm with the calls, to take advantage of the leverage as the option moves itm?

the op says he "can pick 'em" (the underly), i say take advantage of it and leverage the option selection. jmho.



Quote from drcha:

Looks like you are a trader of long ITM calls?
More...
 
Quote from drcha:

Looks like you are a trader of long ITM calls?
More...

At this point in time long calls and puts are all my modest grasp of options will allow. They do not need to be ITM just not too far away from the money...
 
Quote from traderlux:

if you had a high degree of confidence the underly would advance in price in a relatively short time frame, would you not want to go just or more otm with the calls, to take advantage of the leverage as the option moves itm?

the op says he "can pick 'em" (the underly), i say take advantage of it and leverage the option selection. jmho.
More...

Hi traderlux

Good point. I have so far found that ATM offered slightly more psychological comfort. Simply put, I find it easier to to say that "in the not too distant future the price of x will be higher (or lower) than it is NOW"

A good place to start then with this exercise will be to buy the options closest to the strike and the ones just OTM and compare how the price of both differ with regards to the movement of the stock.

Thanks for your input.
 
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