Vertical Spreads for Aggressive Growth

[Cache Landing]

Quote from cnms2:

I suggest using stop, one-triggers-other(s), one-cancels-other(s), contingent orders. They'll take care of the situations when you can't watch the market or when the market moves too fast. As they should be market orders, you shouldn't use them to regularly exit your positions, just for protection. They'll also force you to make a plan and stick to it.

Good luck (skill is not enough)!

I usually do use contingent orders when I can't be at a computer. I agree with you that they shouldn't be used to exit all orders. The unforeseen emegency put me in a situation where I needed to have a contingent order but didn't have the opportunity to place one. I wasn't all that concerned this morning, but logged on to find out that the floor had fallen out from underneath AAPL. Isn't it funny that you can watch a position day in and day out without any movement, and the one morning that you can't be there, BOOM armageddon. Always expect the worst I guess.

Thanks for the input.

 

[Cache Landing]

After talking to ToS about their commissions, I've found that a trader doing what I am on this thread can get a rate of 1.50/contract with no minimums/one time fees. (Consistent larger orders can get $1.25 with no one time charges) Since this is possible for the small account novice, I will be basing my commissions on the negotiated rate of $1.50 until the trades on this thread get large enough to qualify for the slightly lower rate.
Today's Action

Cut losses on AAPL spread. Bought the entire position back for $1.70 for a loss of $120.

Year to Date P/L

Account Value: $10,051.00

YTD Gross P/L: 90.00

YTD Commiss: 39.00

YTD Net P/L: 51.00

YTD % P/L: 0.5%

I think this will (hopefully) be the last adjustment that I make to the commission rates. I thought about not including commissions at all because every broker is different, but the concept of this thread requires that I have some indication of how much commission I'm paying relative to the gains made. Sorry for the confusion.

Happy discounted trading to all.

Cache

 

[Cache Landing]

I decided to take the opportunity on IBM. The IV wasn't good enough for me to want to do a spread so I took a small position with long puts. I'm placing a stop in at $81.50. Next support appears to be 77.50 but I'm going to place a trailstop when it drops below 78.

 

[Cache Landing]

I've been really tempted lately to take a position in SHLD. My real portfolio already has a couple SHLD positions. It has been locked in a tight range for a while now and is nearing the bottom of that range. That support has held several times, but something tells me that it can't stay in that range forever, and when it breaks out, the move will be big. I'm wondering if the current downward pressure in the market will be enough to drag it through support.

Anybody want to take a stab at this one?

Cache

 

[RichardRimes]

Quote from Cache Landing:

I've been really tempted lately to take a position in SHLD. My real portfolio already has a couple SHLD positions. It has been locked in a tight range for a while now and is nearing the bottom of that range. That support has held several times, but something tells me that it can't stay in that range forever, and when it breaks out, the move will be big. I'm wondering if the current downward pressure in the market will be enough to drag it through support.

Anybody want to take a stab at this one?

Cache

Hey Cache...I have thoughts on both IBM and SHLD..fwiw...
I LOVE IBM....in the mid to low 70's last summer did some call and call debt spreads when it was mid 70...making decent coin..it certainly could go there...

SHLD...been following it for some time. While Eddie L. did a fantastic job no question...a good part of "why" was the excellent real estate values which I think (RE) now is over-valued somewhat and they will not do as well in that regard. K-Mart and Sears are neither the best of breed so fundamentally I dislike this stock and I think you are correct in the technical aspect...having come down to 120 and trading in this range for some time now...IF the over-all market goes down then SHLD may certainly come down harder. Little confused on its PE I've seen both 11 and 22 but I'm looking at it as a PUT Calendar candidate.
GL d

 

[Cache Landing]

Quote from DonnaV:

Hey Cache...I have thoughts on both IBM and SHLD..fwiw...
I LOVE IBM....in the mid to low 70's last summer did some call and call debt spreads when it was mid 70...making decent coin..it certainly could go there...

SHLD...been following it for some time. While Eddie L. did a fantastic job no question...a good part of "why" was the excellent real estate values which I think (RE) now is over-valued somewhat and they will not do as well in that regard. K-Mart and Sears are neither the best of breed so fundamentally I dislike this stock and I think you are correct in the technical aspect...having come down to 120 and trading in this range for some time now...IF the over-all market goes down then SHLD may certainly come down harder. Little confused on its PE I've seen both 11 and 22 but I'm looking at it as a PUT Calendar candidate.
GL d

I don't do many calendars. If you do a calendar on it. Please let me know. I'd like to follow you on that one.

 

[Cache Landing]

Today's Action

BOT 1 IBM MAR 80 put @ 1.7

Year to Date P/L

Account Value: $10,049.50

YTD Gross P/L: 90.00

YTD Commiss: 40.50

YTD Net P/L: 49.50

YTD % P/L: 0.5%

Just a quick update on the positions that I am currently in.

BBY MAR 50/55 bear call: BBY has been moving down nicely since I got in on the bear spread. It seems to be finding some support where it is at right now but I am well below my break even (52)on this one. I currently have a mark to market gain on this of about $85 for a ROM of 28%. Could find support around 47 so I might be looking to make an adjustment if it gets there quickly. That would put the ROM at almost 40% which is worth capturing for a really short trade.

BSX MAR 22.5/25 bear call: Pulled up a bit today. Mark to market, I am dead even on this one. No reason to worry yet. Will make an adjustment if this jumps above 23.10 (break even at expiration) where it should find pretty good resistance.

GS MAR 30/35 bull put: Dropped pretty good today. I'm expecting support at 135. Mark to market at even on this one too.

IBM MAR long put: I was wanting to get into this when it was closer to 81, but today seemed to be a pretty good time.

RIMM MAR 57.5/60 bull put: This has given up most of the big jump it had last week. I'm still well OTM on this one. Currently sitting on a mark to market gain of $30 for an ROM of 8%.

 

[Cache Landing]

Looks like I might have waited a bit more to get a better fill on IBM, but it's hard to be that precise.

Looking to get into a bear call spread on SPX tomorrow. This one will likely end up in an IC but I'm not going to put the whole IC on at one time. I'm getting to be bearish on the market as a whole, so it seems like a pretty good time to establish a bearish market position. This one will be OTM so as to give myself a little cushion.

I'd like to commit a couple thousand more dollars to MAR positions, then I have to be patient because I don't want everything expiring on the same day.

Cheers,
Cache

 

[RichardRimes]

Quote from Cache Landing:

I don't do many calendars. If you do a calendar on it. Please let me know. I'd like to follow you on that one.

I did do the calendar..I'll post on it tomorrow...

 

[Cache Landing]

BBY gapped against me today on a surprise 4Q revision. They are now at heavy resistance. They almost hit my stop but have since checked back down. I'll be keeping a close eye on this one. If the resistance holds and they don't hit my stop then I'll wait it out for a bit. If I get close to break even then I plan on closing the position.