My option trades

Whoa....anyone else watched AAPL today? I saw it at $523 and thought it would be nice if I just put 1-2 contracts on the put side to see if it woulf reverse lol.....I wanted to wait for next week's option expiration before entering, but didn't expect a -30 point move from that intraday level I saw.

We could finally be looking at the start of a 5% correction here if not more. To me, AAPL was the last bull straw holding the rally together.
 
Quote from ryanpatrick:

Whoa....anyone else watched AAPL today? I saw it at $523 and thought it would be nice if I just put 1-2 contracts on the put side to see if it woulf reverse lol.....I wanted to wait for next week's option expiration before entering, but didn't expect a -30 point move from that intraday level I saw.

We could finally be looking at the start of a 5% correction here if not more. To me, AAPL was the last bull straw holding the rally together.
More...

Picked up $12 in the shares/options today. In one of the aapl threads.
 
Quote from ryanpatrick:

Whoa....anyone else watched AAPL today? I saw it at $523 and thought it would be nice if I just put 1-2 contracts on the put side to see if it woulf reverse lol.....I wanted to wait for next week's option expiration before entering, but didn't expect a -30 point move from that intraday level I saw.

We could finally be looking at the start of a 5% correction here if not more. To me, AAPL was the last bull straw holding the rally together.
More...

Ryan,

I also keep wondering when we will get at least a -5% correction?
Its seems like since December 20, 2011 every small correction has been sideways instead of down (see attached chart of SPX).
Its possible that this parabolic market action will continue until we reach the prior high of 1,370 which occurred in the first week of May 2011. From that high in the first week of May 2011, a correction set in which ended in the first week of Oct 2011 at 1075 (-21.5%).


Jeff
 

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Quote from jeffalvinson:

Ryan,

I also keep wondering when we will get at least a -5% correction?
Its seems like since December 20, 2011 every small correction has been sideways instead of down (see attached chart of SPX).
Its possible that this parabolic market action will continue until we reach the prior high of 1,370 which occurred in the first week of May 2011. From that high in the first week of May 2011, a correction set in which ended in the first week of Oct 2011 at 1075 (-21.5%).


Jeff
More...

Thanks for the chart, at times I'm just too lazy to pull up SPX at all. But it looks easier to predict after viewing that chart. Looks to me like a break below 1340 pushes us back lower and test 1331, while breaking above 1350 will probably take us to that 1370 target of yours. Otherwise, we look sort of stuck here in 1340-1350 range that we got in about 8 days ago. I'll let the bulls and bears fight it out then...doesn't matter who wins, I've been following plenty of overbought stocks at this point. Some could use some kind of correction, including AAPL. PCLN is another in need of some correction and I'd love to see a correction before it reports in late feb. On the long side, I guess I can follow NTAP for a call set up.
 
I did my study, but everything is still inside an upside channel. I don´t see a correction, until it actually happens. I´m betting to the upside.

Ryan, when you bet, are you betting OTM, or ITM, and at what strikes? Just a curiosity of mine.
 
I have to laugh, when Atticus tell Ryan he is going to blow out. Atticus is a successful scientific trader. Lots of esoteric traditional studies, and plays successfully a time consuming trading game.

Still in looking at my own account so far, from Jan 1st in 6 weeks, my account is up 6% in total. Small as it is.

While Ryan is up 150% thereabouts in the same time period.

THAT SHOULD TELL YOU SOMETHING?

I look at Ryan as a handicap gambler with experience and an edge at the race track. I´m not sure anybody else can substitute for that edge?
 
Quote from falconview:

I did my study, but everything is still inside an upside channel. I don´t see a correction, until it actually happens. I´m betting to the upside.

Ryan, when you bet, are you betting OTM, or ITM, and at what strikes? Just a curiosity of mine.
More...

Yeah, I'll wait for 2 days closing below 1340 or a significant 2-3% close below 1340 to call it a correction.....1340 and 1350 are key numbers for me now.

As of the earning trades, here's what I've adjusted to now.....I'll stay as close to at the money as possible, so either strike above or below the stock price. As for long call/put or spread, if the stock moves by its previous 4 avg % swings and the options I want will hit 100% intrinsic value, then I consider those options fair value or cheap. If the stock was to move by its avg swing and the options cannot make a 10% pop, then I'll consider those options expensive.

As an ex. I'll use FOSL where I went with the spread. FOSL was around $103 with the 105 calls trading at $4. The last 4 Q report from FOSL showed two times it only went +9.5%, and so I used that move to calculate where FOSL would trade up to at the minimum. $103*9.5% came to the shares trading around $112.80. From the 105 call that I would grab, I'd only get $7.80 back from a $4 initial risk. That tells me the options were too expensive for the potential price move. And so I changed it to an initial risk of $3 by selling 115 calls at $1, with the potential $7.80 still in the set up for me.

Again, if atticus is reading this, I will look to leg out to maximize the profit from this set, but to make things simple I'm using estimates. My point is from the start, I already like my risk with the spread as compared to just a straight call. And of course, all this only came about because of research on FOSL's previous reports and its tendencies through experience. I guess I couldn't tell you that FOSL would go up with such confidence without the experience I had on FOSL. I had been trading the stock higher in FOSL's earning report all the way up to its highs of $145 and even took a loss on that drop on FOSL following its report in August 2011. But that's basically how I come in with my risk on each trade.
 
Ryan,

Good job on ACOM, the call/put debit is almost at a double!


Jeff


Very cheap options are really the key to these things and a catalyst to propel the stock in either direction. That means smaller movements give a profit easier on the total debit.
 
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