My Options Play
- Thread starter Multioption
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Thanks pinabetal:
I enjoyed your comments on those stocks. I tried to understand how you do your prediction based on the charts before and I think that I have got it. I will use your comments in my future trades. It seems that you do your prediction soley based on the previous days' chart and don't take into account of any upcoming Q reports or... I am sure if you really want to trade, you will do more research. I usually do my trades on options and that is why I wanted to get a second opinion on those stocks for a longer time frame. 95% of the time,I sell naked puts and calls. Rarely I buy options. Either I short the stocks or sometimes I buy them and most of my trades are options. I had 22 option positions that 12 of them were for this month that will expire. If I am about to get assigned, I shoot it to the next month and sell more time. So far it has worked well for me. Have a good vacation.
I enjoyed your comments on those stocks. I tried to understand how you do your prediction based on the charts before and I think that I have got it. I will use your comments in my future trades. It seems that you do your prediction soley based on the previous days' chart and don't take into account of any upcoming Q reports or... I am sure if you really want to trade, you will do more research. I usually do my trades on options and that is why I wanted to get a second opinion on those stocks for a longer time frame. 95% of the time,I sell naked puts and calls. Rarely I buy options. Either I short the stocks or sometimes I buy them and most of my trades are options. I had 22 option positions that 12 of them were for this month that will expire. If I am about to get assigned, I shoot it to the next month and sell more time. So far it has worked well for me. Have a good vacation.
No, I don't do fundamental research and rarely listen to the news whether in live trading or demo calls. I look at the short-term chart history. I am of the belief that whatever the fundamentals are or whatever the news is the effect of such things will all show up in the tape. I just need to know "how" to read the tape. Intraday, daily, weekly, monthly tape. Will explain what I mean by these different tapes in a moment.
I try to find the context of the daily bar. Is the stock in accumlation, dist., markup, markdown stages? What does the daily range look like? Where is the close and the open? What is the present trend. What is immediately to the left for say 4 to 5 days? What are the daily ranges telling me. What is volume doing on each bar? How does todays volume bar relate to the other volume bars. This helps me to get the trend and to see what the "smart money" is doing. There are rules to interpret the bars.
The I run EOD dat into my proprietary software to get price entry/exit, velocity of the present trend, acceleration.
I don't won't to argue about this but I will say that tape reading IS MUCH more than just intraday bid/ask price/size and the price and transactions prices and size. Many trader will argue with one over this. Here is my take: The daily intraday tape is simply looking at the bid/ask price and size and transaction price and size and trying to determine very short-term trend. A daily bar is simply a composite picture of all of the above. A weekly bar is simply a composite of the daily bars. A monthly bar the composite of weekly and all the daily bars in that month. Intraday charts are a composite of transaction with-in a certain time frame. So you can have:
1) intraday tape reading that can consist of bid/ask price and size and transaction price and size analysis AND intrady charts with intraday volume on those charts.
2) Daily tape reading consists of looking at a grafical composite of ALL the intraday price and volume action and interpreting that in the context in which it is found using certain rules.
3) Weekly tape reading is the same. All weekly transactions and volume and intrepreting this in the context in which it is found following certain rules.
4) Monthly....same thing.
There is more than ONE way to read the tape. I had to argue this point before. Not sure I ever convinced anyone though.
Maybe one or two people.
Thanks cnms2. Very interesting article.
Cheers !
If you're selling naked options, here there's an article on Niederhoffer and Taleb: Blowing Up
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"...Last fall, Niederhoffer sold a large number of options, betting that the markets would be quiet, and they were, until out of nowhere two planes crashed into the World Trade Center. "I was exposed. It was nip and tuck." Niederhoffer shook his head, because there was no way to have anticipated September 11th. "That was a totally unexpected event."
I have read that article before. That was scary. I don't go too much into one stock. I like to do maximum of 20 contracts. I broke my rule by going short 62 contracts XLNX 25 Jan 2006 that has worked well so far and I have got 10K out of it so far . I expect it to expire. I am also selling 27.5 call for December to get more juice out of it. But you are right. shit happens. Maybe the best options are QQQQ's options.
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"...Last fall, Niederhoffer sold a large number of options, betting that the markets would be quiet, and they were, until out of nowhere two planes crashed into the World Trade Center. "I was exposed. It was nip and tuck." Niederhoffer shook his head, because there was no way to have anticipated September 11th. "That was a totally unexpected event."
I have read that article before. That was scary. I don't go too much into one stock. I like to do maximum of 20 contracts. I broke my rule by going short 62 contracts XLNX 25 Jan 2006 that has worked well so far and I have got 10K out of it so far . I expect it to expire. I am also selling 27.5 call for December to get more juice out of it. But you are right. shit happens. Maybe the best options are QQQQ's options.
Thanks Pinabetal, I appreciate your having taken the time to advise me.
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