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Trading Results 8/5/11

Options expiration day provided at least one opportunity, and price action in general was good.

About three hours into the open I sold C 33 puts that were expiring on Friday.  They were paying about 44 cents each while C was trading around 33.25.  I looked at the volume and open interest, and I figured that if it did go below 33 I was facing at most (absent something really earth moving) having the stock put to me at around 32.50ish.  Sure enough,  not long after I sold the puts, C started to fall and went down into the 32 range.  At that point the IV was so high and nothing was worth any real news so I sold some $30 puts expiring next week that were paying way more than they should be.  I guess when people panic they know how to really panic.  While I wanted to, I did not add to the 33's due to the possibility that the whole market could really take a dive.  If it did I wanted to have plenty of buying power to start entering orders with.

It didn't take long and C was right back but gave me a little bit of a ride (I did not have a big position on).  They are now done and expired and I will still be facing next Friday unless I cover with the $30 puts.  I think I will be ok if I end up getting C put to me for $29 and change so I am not worried about it.  I like C and I really like C under $30.

The PCS puts I wrote the day before traded lower for most of the day and ended up lower.  I intend to hold a while longer and see how that goes.  I am expecting a fairly decent week next week so hopefully I will be able to just watch the time run out and they will be OTM expiration Friday.

I can't lie, I am not liking my gold short.  Especially after the downgrade by the US even though I don't think the downgrade matters.  Of course liking a trade doesn't change much in terms of if I will make money or not.  Many of my trades I don't like and they do great.  Gold has been up 124 months in a row according to kitco's Frank Holmes. It also has been up so much recently that it triggered a TDCombo 13 on the daily chart.  This is about as strong as a sell signal as I have seen with it in a long time.  I will be looking for it to correct to under $1550, and I will review it again for direction. One could say that it's a bull until it's not, and that after 120 months it had a lot of juice left in it.  That is all true, but the last time it gave a sell 13 signal it gave a strong pull back and unless it can break to a new high again, I will look for the correction.  My short is a synthetic naked call.  Each day I collect from the time decay.

I am currently reading Quantum Trading by Fabio Oreste and looking at other ways of reviewing DeMark indicators such as DeMark Prime and Thomson with the DeMark add on.