You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Trading calls on a strong stock
- Thread starter J-Law
- Start date
are you doing OTM, ITM, DITM?
and what is your risk reward ratio do you want?
I would do weeklies on this one anything can happen in 3 months. it does a 5+ point dump every week and recovers. Use this to your advantage. do a spread 5 points below the previous week high, this is a good find i'll watch it for a while too.
and what is your risk reward ratio do you want?
I would do weeklies on this one anything can happen in 3 months. it does a 5+ point dump every week and recovers. Use this to your advantage. do a spread 5 points below the previous week high, this is a good find i'll watch it for a while too.
Quote from J-Law:
Also not seeing weekly expirations on this stock. IB earliest expiration is April 20th.
There is no weeklies for FOSL, maybe in the future they might add weeklies.
http://www.cboe.com/micro/weeklys/availableweeklys.aspx
Quote from J-Law:
FOSL - on 52 week highs today. Chances are stock will go higher. If I was looking to trade the June calls is it even worth to the spread them against higher strikes?
What's the best way to play the continued upside in this or any strong stock?
Thanks
J-law
Well if you have a strong directional bias, don't cap your profits with a spread- especially if you're trading a couple months out.
If it is this month, I'd spread it in that case- if it's at 52 weeks high and you believe on some kind of resistance developing, I'd even dare to fly it hoping it screws around in that spot and take a profit a week or two from now well before expo.
It's worked for me before... just depends on where you see volatility going. That's key. That's the gist of trading options.
Quote from ForexForex:
There is no weeklies for FOSL, maybe in the future they might add weeklies.
http://www.cboe.com/micro/weeklys/availableweeklys.aspx
thats too bad. do a calendar spread if you're doing OTM calls.
FOSL has some wider spreads, but if you don't want to limit your upside yet not get killed if it plummets and can work them a bit, you could try a call ratio backspread.
For example, the June 135 is trading at 8.6 / 9.0 and the June 145 is 4.8 / 5.0, so you put the trade on for a debit of about 1.4.
Your worst case is if FOSL just sits there over the next 3 months, but that doesn't seem to be a very common occurrence when you take a look at the chart over the last two years.
I just threw those strikes out and expiration out there as an example. Personally, I like to try and get as close to a credit as possible when I put on one of these, but that might be difficult for this particular stock.
Anyway, just a thought.
For example, the June 135 is trading at 8.6 / 9.0 and the June 145 is 4.8 / 5.0, so you put the trade on for a debit of about 1.4.
Your worst case is if FOSL just sits there over the next 3 months, but that doesn't seem to be a very common occurrence when you take a look at the chart over the last two years.
I just threw those strikes out and expiration out there as an example. Personally, I like to try and get as close to a credit as possible when I put on one of these, but that might be difficult for this particular stock.
Anyway, just a thought.