Trading in Luxury
- Thread starter traderlux
- Start date
trade plan for SPY BPS
trade an index to avoid single stock suprises.
trade SPY, better understanding of it than the futures options with euro-type expiry.
look for a support level and place the BPS below it.
use BB as the main T/A study.
look for a dime, or a nickel credit on a dollar.
Spreads $1 or $2 wide, also consider $3 or up to $5. Still evaluating.
trade front month and enter wk after OPX wk, or any time after.
plan allows for additional entries of the same spread or a different one.
plan to exit OPX wk, usually by Tue.
hold to expiry if far enough OTM at the time.
loss exit, get out if the spread goes over 2X the original price (original credit).
no adjustments, solid, simple plan going in, if things go bad, get out and plan next trade.
trade an index to avoid single stock suprises.
trade SPY, better understanding of it than the futures options with euro-type expiry.
look for a support level and place the BPS below it.
use BB as the main T/A study.
look for a dime, or a nickel credit on a dollar.
Spreads $1 or $2 wide, also consider $3 or up to $5. Still evaluating.
trade front month and enter wk after OPX wk, or any time after.
plan allows for additional entries of the same spread or a different one.
plan to exit OPX wk, usually by Tue.
hold to expiry if far enough OTM at the time.
loss exit, get out if the spread goes over 2X the original price (original credit).
no adjustments, solid, simple plan going in, if things go bad, get out and plan next trade.
...finding bottoms....
http://leavittbrothers.com/blog/?p=2819#more-2819
....found an interesting bit of information on market bottoms vs tops on a blog at leavitt brothers....
""Before the Open (Mar 18)
I donât guess tops. Iâll guess a bottom because those are much easier and tend to happen on a single day, but tops tend to be of the rounded variety and thereâs always a few extra surges up to crush the bears who jump the gun with shorts.
all my indicators are of the âbreadthâ variety.
At a bottom, the put/call will spike, the VIX will spike, the # of new lows will spike, the A-D line will plunge, etc etc.
The opposite is not true. You canât turn these indicators upside down and treat them the same at a top. The VIX can stay low for a long timeâ¦when the # of new highs spikes, the market typically continues upâ¦etc etc.
Bottoms tend to form in one or two days of hysterical selling while tops tend to roll over.""
Jason
http://leavittbrothers.com/blog/?p=2819#more-2819
....found an interesting bit of information on market bottoms vs tops on a blog at leavitt brothers....
""Before the Open (Mar 18)
I donât guess tops. Iâll guess a bottom because those are much easier and tend to happen on a single day, but tops tend to be of the rounded variety and thereâs always a few extra surges up to crush the bears who jump the gun with shorts.
all my indicators are of the âbreadthâ variety.
At a bottom, the put/call will spike, the VIX will spike, the # of new lows will spike, the A-D line will plunge, etc etc.
The opposite is not true. You canât turn these indicators upside down and treat them the same at a top. The VIX can stay low for a long timeâ¦when the # of new highs spikes, the market typically continues upâ¦etc etc.
Bottoms tend to form in one or two days of hysterical selling while tops tend to roll over.""
Jason
trade review: close on fri 3/26, SPY @ $116.58
Have not yet opened a credit trade for Apr expiry, SPY moved up too quickly, the spread i was watching got cut in half real fast. Also my t/a is indicating a potential short term sell signal may develop, which should help in getting a better spread. At the down turn, put on the spread when it turns back up. Some times too much thinking gets in the way.
Down to 3wks to expiry and holidays next week and earnings starting in 2 wks, and dreaded May in 5wks!
trade review: fri 4/16, SPY@119.36 (ref earlier posts below)
did not trade a BPS for April. SPY was moving up too strongly and i was looking for a pull back to get a decent credit. i also had some other pressing issues to take care of and could not get a good study of the market to be confident with a trade selection.
thus another problem area shows up. when the market starts to move continuously strongly in one direction it is difficult to place a trade with confidence and get a good credit. as a result i missed an entire month of potential income. a similar thing in the opposite direction happened with the Feb options.
for a May trade, i am thinking i will scope out either a SPY BPS, or a AA (Alcoa) covered call.
Quote from traderlux:
03-22-10 09:33 AM
trade idea for April BPS for SPY @$115.87
estimated support levels at 112, 109, 104
considering Apr 105/108P, cr .14/2.86
4.9% rom
short strike 7% OTM
Time: 4 wks
Quote from traderlux:
03-28-10 11:55 AM
trade review: close on fri 3/26, SPY @ $116.58
Have not yet opened a credit trade for Apr expiry, SPY moved up too quickly, the spread i was watching got cut in half real fast. Also my t/a is indicating a potential short term sell signal may develop, which should help in getting a better spread. At the down turn, put on the spread when it turns back up. Some times too much thinking gets in the way.
Down to 3wks to expiry and holidays next week and earnings starting in 2 wks, and dreaded May in 5wks!
did not trade a BPS for April. SPY was moving up too strongly and i was looking for a pull back to get a decent credit. i also had some other pressing issues to take care of and could not get a good study of the market to be confident with a trade selection.
thus another problem area shows up. when the market starts to move continuously strongly in one direction it is difficult to place a trade with confidence and get a good credit. as a result i missed an entire month of potential income. a similar thing in the opposite direction happened with the Feb options.
for a May trade, i am thinking i will scope out either a SPY BPS, or a AA (Alcoa) covered call.
Quote from traderlux:
03-22-10 09:33 AM
trade idea for April BPS for SPY @$115.87
estimated support levels at 112, 109, 104
considering Apr 105/108P, cr .14/2.86
4.9% rom
short strike 7% OTM
Time: 4 wks
Quote from traderlux:
03-28-10 11:55 AM
trade review: close on fri 3/26, SPY @ $116.58
Have not yet opened a credit trade for Apr expiry, SPY moved up too quickly, the spread i was watching got cut in half real fast. Also my t/a is indicating a potential short term sell signal may develop, which should help in getting a better spread. At the down turn, put on the spread when it turns back up. Some times too much thinking gets in the way.
Down to 3wks to expiry and holidays next week and earnings starting in 2 wks, and dreaded May in 5wks!