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  • Having Fun Trading Expiring Options! SPX, Nasdaq, IBM, NFLX, GOOG, PCLN, APA, EOG, OXY, NOV 0 comments
    Sep 16, 2011 12:46 AM | about stocks: IBM, NFLX, GOOG, PCLN, APA, EOG, OXY, NOV

    It has been a volatile week, once again.  However, overall, the movement has been "up"!  The market was strong today as major central banks around the world pledged support for Europe's financial system.  These past couple of days, we have been having fun trading fast trades in the Trading Room on September options, which have only until tomorrow to trade.  Yesterday, we focused on IBM, GOOG, and PCLN as market started to strengthen.  In early afternoon, I pointed out that the market was starting to turn up and proceeded to call out plays.  Besides the plays that we were focusing on, the important thing for me was that the energy sector, which had been weak, had turned up:

    September 14, 2011 10:31 AM
    above 1180; we could see 1200 tested again... this market is turning up.

    September 14, 2011 10:35 AM
    ramping up...

    September 14, 2011 10:41 AM
    energy stocks waking up...

    September 14, 2011 10:42 AM
    if you're daring, look at Sept 165 calls for a quick trade...

    September 14, 2011 10:52 AM
    turning up...

    September 14, 2011 12:11 PM
    165 calls; from $2.4 to $3.9 in 1 hour. that's a good scalp!

    September 14, 2011 12:12 PM
    energy stocks
    really strong!


    September 14, 2011 12:14 PM
    530 calls; $5 to $9+ in 1 hour!

    September 14, 2011 12:22 PM
    165 calls at $4.4

    September 14, 2011 12:38 PM
    up $1.5 on 535 calls in 15 minutes!

    September 14, 2011 12:38 PM
    SPX 1200
    would be a nice place to take profits...

    Both PCLN 530 calls and IBM 165 calls doubled in about 2 hours, and we took profits just in time as SPX hit 1200.  In the last 20 minutes, SPX fell 20 points to close below 1190.  Beside these stocks that were shooting higher, I also pointed out the weakness in NFLX:

    September 14, 2011 10:45 AM
    still red...

    This morning, news came out that NFLX was loosing more customers than expected when the company raised its prices.  NFLX immediately tumbled more than $30!  As the market opened, we quickly cashed out GOOG calls for another double and shifted our focuse to trade NFLX puts:

    September 15, 2011 7:07 AM
    just cashed out on the sept 535 calls for an overnight double!

    September 15, 2011 7:07 AM
    losing members on the price increase; down 12.5%

    September 15, 2011 7:14 AM
    looking at puts... 
    (we patiently waited 45 minutes for the knee-jerked bounce after the plummet at open)

    September 15, 2011 9:19 AM
    still falling...

    September 15, 2011 9:20 AM
    175 puts doubled in 90 minutes

    September 15, 2011 9:45 AM
    looks like it could see $170 soon... 
    (NFLX was above $175; after just over an hour, NFLX went below $170)

    September 15, 2011 11:04 AM
    wow! sub-$170! I walked away and left a limit order to sell those 175 puts at $5. They are at $7! was only $1.4 this morning! hope someone you caught those with me!!

    From $1.4 to $5, that's a +357% gain in just 4 hours!  Although we left $2 on the table, we also didn't spend so much time sitting in front of the computer.  When things are moving fast, sometimes, it is better to know your target and just place an order (a limite order or a conditional order) and walk away.  This will greatly help you to keep calm and not get shaken out of your trade.  One of our members made this comment:

    jjovit September 15, 2011 12:04 PM
    I got some NFLX puts as well at 1.34 and sold as well when I left at 2.75

    Although he still got a quick double, but, since I already gave a target of $170, he should have known that the 175 puts would at least hit $5.  This is why I left an order in to sell at $5.  When I came back to my desk an hour later, the order had already gone through.  Catching a good trade is nice, getting a great trade filled while you're not even working is even better!

    I can't stress enough the importance of the Trading Room.  With these fast trades that only last for an hour or two, I will only discuss them in the Trading Room.  At the same time, I will always have slower trades in the background for members that are not in the Trading Room.  Especially during the expiration week, quick trades like the above can be very profittable, and, you don't have to trade big.  5 to 10 contracts on each play, or even 2 to 3 contracts, can make you thousands of dollars!

    (to subscribe to our Premium Services, please visit our Services Page or CLICK HERE to watch a step-by-step instructional video)

    The Dow finished up +186.45 points; SPX added +20.43 points; Nasdaq gained +34.52 points:

    Most sectors were up today.  As mentioned on Tuesday, SOXX (semiconductors) was strong again, up +1.43%.  OIH (oil services) added +1.7% and XLE (energy) gained +1.99%.  XLF (financials) popped +2.54%.  Both GLD (gold) and SLV (silver) slumped.


    SPX added +20.43 points to close at 1209.11.  Its daily MAs flattened and the MACD turned up.


    Nasdaq gained +34.52 points to close at 2607.07, above 2600.  Its daily MAs and MACD went higher.

    The market has been incredibly strong, facing the problems in Europe.  Investors showed tremendous faith and optimism, even though news came out of Europe have not been very positive.  Since Monday morning, buyers came in to buy the opening lows, and stocks have been climbing ever since.  Tomorrow is Friday and option expiration day.  After rallying for 4 days, we may start to see some profit-taking.  We are once again back into mostly cash, and will be nimble and light in our trading tomorrow shall further opportunities present themselves.

    Good night and HappyTrading! ™

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