Michael Clark's  Instablog

OPTIONS CORNER
Short-Term Trading in Options.
Thursday 30 December 2010

We're up 25% since 20 December 2010, with a heavy weighting in precious metals and biotech options.  14 new trades below.

Options Trading Scorecard:

	DAILY PORTFOLIO			Active
% Gain	Since 12/20/10		Profit	Trades
24.81%	Options		$86,833	35

TRADING SIGNALS TODAY

For THURS	CGTS NEW TRADES
30-Dec
ISSUE	TRADING	CLOSE	SIGNAL
	SYSTEM
SLW FEB 40 calls	M4 SPIKE	2.26	ENTER LONG
SSRI Feb 30 calls	M5 3 ASP LT 2a	1.25	ENTER LONG
TOO Feb 27.5 calls	M5 3 ASP LT 2a	2.3	ENTER LONG
NVDA Jan 15 calls	M2F 14% Trade	0.53	ENTER LONG
MWW Jan 24 calls	M2F 14% Trade	0.9	ENTER LONG
CYTX FEB 5 Calls	M4 Blank	0.65	ENTER LONG
VPHM Feb 17.5 calls	M4 Blank 2	1.1	ENTER LONG
SYNA Jan 30 calls	M5 3 Chart Trade	1.2	ENTER LONG
HAL JAN 40 calls	M5 3 Chart Trade	1.53	ENTER LONG
FSLR FEB 125 calls	M5 3 Avg ASP Diff Sum	10.99	ENTER LONG
RIMM FEB 55 calls	M5 3 Avg ASP Diff Sum	4.7	ENTER LONG
VALE FEB 32 calls	M5 3 Test Combo	2.64	ENTER LONG
ORCL Jan 30- calls	M4 Rev 3 Trade	1.65	ENTER LONG
UPS Jan 70 calls	M4 Rev 3 Trade	3.14	ENTER LONG

SLIDE SHOW OF TRADES:



Buy CYTX Feb 5 calls @ .65.



Buy FSLR FEB 125 Calls @ 10.99



Buy HAL Jan 40 calls @ 1.53.



Buy MWW Jan 24 calls @ .9.



Buy NVDA Jan 15 calls @ .53.



Buy ORCL Jan 30 calls @ 1.65.



Buy RIMM Feb 55 calls @ 4.7.



Buy SLW FEB 40 calls @ 2.26.



Buy SSRI FEB 30 calls @ 1.25.




Buy SYNA JAN 30 calls @ 1.2.



Buy UPS JAN 70 calls @ 3.14.



Buy VALE FEB 32 calls @ 2.64.



Buy VPHM FEB 17.5 calls @ 1.1.

Two bonus charts below.  Stocks giving buy signals that don't trade options.








___________________________________________________

A Disclaimer of sorts:

I will update these positions regularly, so we can all see how we are doing with our short-term speculating.

I am bullish on gold long-term (until Bernanke is fired, and more generally until about 2019, the end of the deflation cycle) -- and I'm relatively bullish on stocks until QE is abandoned.  QE does many things, one of which is to try to make sure that stocks and bonds don't decline.  The Fed, quite likely, has guaranteed to bankers the advance of stock prices.  As long as the Fed is willing and is allowed to backstop stock prices, short positions are very dangerous, except in isolated cases.  Bond vigilantes are showing Mr. Benanke that his designs may not be able to proceed without resistance however.  Rising rates are a slap in the face of American power; the slap is welcomed by those of us who think debt is the problem that needs to be addressed, destroyed, rather than expanded and extended.

Trading options is highly speculative and can be dangerous.  Pricing of options is never very clear; buying options is almost always less prefereable than selling options, in terms of likely profits.  But buying options gives an investor a HUGE BANG FOR THE BUCK.  Getting accurate price data on options (especially those thinly-traded) is also often a problem, with which we'll have to work.

If one knows what direction a stock is moving, short-term options can be profitable.  The problem with options, of course, is that they, like ourselves, decay with time.

The cheaper options expire more quickly (one can always buy long-term options is one wishes to speculate on long-term stock or market moves).  I like short-term expirations, cheap options, and getting in and out (with profits).

I have many short-term trading systems.  I will use several in this Options Corner.  The first I start with I call "M5 3 Chart Trade" which really relies on the M5 3 Momentum Indicator to trigger the trade, always in the same direction of the major trends.

Successful trading!  We know the game is fixed; but let's ride on the back of the dragon for as long as we can.

More information on the CGTS systems can be found at:
home.mindspring.com/~mclark7/CGTS09.htm

MICHAEL J CLARK
Clark's Gate Timing System
Hanoi, Vietnam
84 4 221 92210