My option trades

[ryanpatrick]

Quote from Put_Master:

Technically, I like POT at $40, give or take $0.50.
That is the price I i have it on alert for, per my "watch list."
If it trades in that range, I will then review it's fundamentals.
If they are acceptable, i will then consider selling a put in the $35 area.
The current price of POT is still to far away for me to bother doing my multi point fundamental analysis.
But I do like the $40 area technically, per the 2 year chart.
After it gets there, it's just a matter of selecting which strike to sell in the $35 area.

Interesting, you seem to like POT a lot at $40. Why not put in an October 45 put and see how low the shares can take it. That trendline connecting the tops in 2011 along with the recent highs in July 2012 seems to confirm a continuation of the down trend. If so, a put position right now would be a fairly low risk trade. In fact, why not grab it in front of expected earning reports from its peers. If its peers come out with weak earnings next week, you might see weak POT hands jump off the "high" wagon....

On second thought, scratch the Oct 45 puts, take the November 46 puts for $3.50 with $1.50 stop loss on the options and set up the first target at $5.00. Then raise the stoploss to $4.00 and set up a second target at $7.50 just incase POT overshoots the $40 and hits that $37.50 mark.

 

[Put_Master]

It isn't that I like POT at $40.
It's that $40ish is where I see it's support, per the 5 year chart, if the stock continues it's trend down.
Once it gets in the 40ish area, i would then evaluate what kind of credit is offered to select a strike in the $35 area..... which is where the next level of tech support is seen.
http://finance.yahoo.com/q/bc?s=POT&t=5y&l=on&z=l&q=b&c=

I'm not into guessing, hoping, and then betting,... on whether a stock will drop to a certain tech supported area.
I prefer to wait until it gets there.
If it does, I'll then do my next stage analysis, as to which OTM strike to select, and whether the companies "fundamentals" can support that price.
If it can, I'll then consider risking my cash.

I've got about 1,000 stocks on my watch list, with tech supported "alerts" set up on all of them. And that list grows every day.
When that 1st area of tech support is tested, and I'm alerted to that situation,... I then evaluate where the next tech supported area is, and do a detailed fundamental analysis on the strike price I''m considering. If it passes the test, i then place my bet.

I'm not comfortable making bets as to whether or not a stock will get to a certain price level.
I prefer to wait until it gets there, and then place my bet on the next tech supported area.
And whether the otm strike I then select will hold, and whether I'm comfortable buying it at that price.

My goal is NOT to buy stocks. But I'm wiling to hold them temporarily, if need be.
I'm not closing down a good company at a good price, for a loss.
I'd rather buy and hold it, until the stock recovers from the event that dropped it.
The reason I'm willing to hold them is, because I'm picky about the prices I select.
I'll invest at those prices if they get there. But I'm not comfortable betting on whether or not the stock will actually get to those prices.

 

[mutluit]

Quote from ryanpatrick:
Well, that's it for me...profits of $25.07 on NKE and $904.10 on ACN. I'm at $5,345.67 with open position on ADBE oct 32 calls (bought back the 35 calls yesterday at $0.17).

Hi ryanpatrick, can you please summarize your options trading.adventure?
What experience and profit have you made so far, are you satisfied with the results? And from your experience/advanture what advice/tips would you give to newbie options traders or wannabes in similar financial situation (acct size etc)?

 

[jeffalvinson]

08-21-12 10:55 AM

Quote from ryanpatrick:

Last I left I had $1200 to trade, and brought that down to $750 only after some long hold in PCLN trade.
I made a move from east coast to west coast to be closer to family, so did not really have the time to update. On that news, I did learn the game of golf. It's quite a nice game to play once you get into the swing and all. My scores are still in the 100-115s so plenty of room for improvement, but I liquidated some of my IRA and now have $2250 in what I call "extra cash" to play options with. Of course I'm still going with the notion that I could lose all of the $2250, and I'm setting a goal of $10,000 by year end.
[/B]

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09-28-12 06:47 AM

Quote from ryanpatrick:

Well, that's it for me...profits of $25.07 on NKE and $904.10 on ACN. I'm at $5,345.67 with open position on ADBE oct 32 calls (bought back the 35 calls yesterday at $0.17).

I see a few potential trade next week, but fertilizers aren't my favorite stocks, so we'll see. Safe weekend for all...

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Ryan,

Your account has gone from $2,250 on 8/21/2012 to
$5,345.67 on 9/28/2012.
That's a +137% account gain in 5 weeks!
"You are without a doubt back to your old self."
Most traders would kill for those returns over 12 months, let alone 5 weeks.

How do like having to wake up 3 hours earlier for the opening bell on the west coast?


Jeff

 

[ryanpatrick]

That's how I wake up everyone morning now lol.....new best friend is coffee. I've never really drank it before but it is my new best friend.

As for the account, I think anyone could make such a return trading options on such a small account. I want to set myself up for next year to see if I can do the same on a $10,000 or bigger account. But the goal right now is just to reach $10,000.

I wasn't going to set up something in the fertilizers/seed sector, but after watching so many call options trade on MOS I had expected MOS to struggle this morning, and it did just that. Of course the numbers were a little light too, but so much bullish bet ahead of MOS earnings on plenty of uncertainty. So I reviewed MON and decided on the lowest risk possible on a long option position. I bought the MON weeklys 90/87.5 put spread at $113 avg (3 contracts) which cost me ($351.95). It'll either be a good experience, or a nice return. Either way, it'll give me heads up on what to change in January when these two (MOS and MON) are at it again.

 

[jeffalvinson]

Ok, the 4 kids are done occupying every minute of the summer (they are back in school), so I finally have some time to post a few trades. Have
been reading this thread the past few weeks to catch up.
Good to see Ryan back and making money.
Put_Master, I read all your posts on both threads....your are an awesome put seller and trader! Wow! I believe I counted like 1 trade that didn't quite pan out, out of all those posted trades!
Also, good real world (not theoretical) analysis of various option trade scenario's.

I placed orders for 2 different direction trades today:

[Trade No. 1]

SPY OCT144 Calls
Buy Limit = 1.37
Sell Limit= 1.92 (+40%)
Stop = 1.09

--------------------------------------

[Trade No. 2]

SPY OCT146 Puts
Buy Limit = 2.05
Sell Limit = 2.56 (+25%)
Stop = 1.41


Since each of today's trades only have an initial buy limit (not multiple
Buy No. 1 / Buy No. 2), I simply place an IB Bracket Order for each and let automation do the rest.

Jeff

 

[Put_Master]

<<< Put_Master, I read all your posts on both threads....you are an awesome put seller and trader! Wow! I believe I counted like 1 trade that didn't quite pan out, out of all those posted trades! >>>


I believe the one you are refering to is my $17.50 WMS trade.
That got put to me, and I currently have a covered call on it, which expires in Jan.
I currently also have an active $15 WMS put trade expiring in Oct.
Having the occasional stock put to me is all part of the game.
It's not my goal, but I'm not closing down any trades on good companies, put to me at a good price.
I've sold a few covered calls this past year.
Hence the reason I'm not doing spreads. I'd rather own my companies temporarily, than close them down when things get volatile.

However, I have not really been tested yet, as the market has not suffered a significant correction in quite some time.
The real test will be, how my stocks trade, and how I react, when the market is not quite so friendly.
In preparation for the time, I "ladder" my trades over 1 - 4 months, so I'm not overly concentrated in any single month.
While I use leverage, it's a reasonable amount, so I have no problem owning all my stocks if need be.
I diversify among several sectors.
I'm picky about the stocks and prices I select, ect.....

So while I appreciate your comments,.... save it for after I've been tested.
Any dart thrower can make money being bullish in a strong market. We will see how good my aim is, when the market becomes bearish.... which I hope to take advantage of when it occurs, as it creates even more investing opportunities.
At the moment, I'm not seeing many bullish opportunities on my watch lists.
That is an indication for me to be cautious. As it may reflect an over valued market.

 

[jeffalvinson]

Quote from Put_Master:

<<< Put_Master, I read all your posts on both threads....you are an awesome put seller and trader! Wow! I believe I counted like 1 trade that didn't quite pan out, out of all those posted trades! >>>


I believe the one you are refering to is my $17.50 WMS trade.
That got put to me, and I currently have a covered call on it, which expires in Jan.
I currently also have an active $15 WMS put trade expiring in Oct.
Having the occasional stock put to me is all part of the game.
It's not my goal, but I'm not closing down any trades on good companies, put to me at a good price.
I've sold a few covered calls this past year.
Hence the reason I'm not doing spreads. I'd rather own my companies temporarily, than close them down when things get volatile.

However, I have not really been tested yet, as the market has not suffered a significant correction in quite some time.
The real test will be, how my stocks trade, and how I react, when the market is not quite so friendly.
In preparation for the time, I "ladder" my trades over 1 - 4 months, so I'm not overly concentrated in any single month.
While I use leverage, it's a reasonable amount, so I have no problem owning all my stocks if need be.
I diversify among several sectors.
I'm picky about the stocks and prices I select, ect.....

So while I appreciate your comments,.... save it for after I've been tested.
Any dart thrower can make money being bullish in a strong market. We will see how good my aim is, when the market becomes bearish.... which I hope to take advantage of when it occurs, as it creates even more investing opportunities.
At the moment, I'm not seeing many bullish opportunities on my watch lists.
That is an indication for me to be cautious. As it may reflect an over valued market.

PM,

I would never have guessed that you hadn't seen all the seasons the market has to offer over time.
"Then this will be real interesting if your still naked put selling in a bear market!" When that happens keep posting so we can see what happens.
My friend in Iowa has been doing something similar for the last couple of decades. The twist that he added to the equation is:
1: When the SPX is above its 200 day moving average (bullish market), he only sells puts on uptrending stocks that have pulled back to a support line.
2: When the SPX is below the 200 day moving average (bearish market),
he only sells calls on downtrending stocks that have rallied up to a resistance line.
This method has generated a modest supplemental income for him for the past 20 years.

Jeff

 

[Put_Master]

<<< I would never have guessed that you hadn't seen all the seasons the market has to offer over time.
"Then this will be real interesting if your still naked put selling in a bear market!" When that happens keep posting so we can see what happens. >>>

I've been doing this for 20 - 30 years.
I've seen all the seasons.
But the thing about bear markets is, you never really know you are in one, until you are deep into it.
Thus, it's only in hindsite that you know it was a bear market, and not simply a correction.

For example, last year when the S+P downgraded our debt, and the market frequently dropped 300 - 500 points, with even wider market swings intra day, one could have assumed that was the beginning of a bear market.
But in hindsite, it only lasted several weeks if i recall.
Turns out, it was a fantastic buying opportunity after about a month or two.

Lots of naked and spread investors closed positions and took losses.... or had max losses forced on them. Turns out they could have kept their money if they had kept their stocks.
On the other hand, 2008 was no correction. That was a bear market. I got smacked pretty good back then, when I finally closed my positions.
So we really never know, other than in hindsite.

Bottom line..... if I'm in a position of wanting to close down a deteriorating position, vs buying it,... I'll wish I were hedged and not naked.
But if i don't mind buying and potentially holding my stocks for a while, collecting dividends and selling covered calls,... then I'll be happy i was naked, and not forced to close a spread trade for a loss.
It usually all boils down to whether one is invested at a reasonable price, and whether one is on excessive margin leverage.

 

[diaoptions]

IMPORTANT ANNOUNCEMENT

I have decided to stop posting on ET, this will be my last post. I find the quality of posts has dropped considerably in the past year to a point that ET is a waste of time.

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