OPTIONS CORNER
Short-Term Trading in Options.
Friday Jan 7 2011
It looks like stocks are trying to pull back a bit. Look to take profits on options that expire in January. We think there will be another move up -- but caution is ALWAYS good when trading options.
Options Trading Scorecard (since 12/20/10):
SALES TODAY:
M2F ALT 14% Trading System: NVDA JAN 15 calls bought 12/29/10 @ .53. Sold today @ 4.3. Gain of 711.32%.
M5 3 AVG ASP DIFF Trading System. PCLN FEB 390 calls bought 1/3/11 @ 32.5. Sold today at 57.32. Gain of 76.37%.
M5 3 CHART Trading System. POL FEB 12.5 calls bought @ 1.6 on 1/3/11. Sold on 1/6/11 @ 1.5. Loss of 6.25%. Trading Signal gave a sell signal.
PURCHASES TODAY:
___________________________________________________
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. Typically we work with the last close, if it falls between bid and offer. If it does not, then we average the bid/offer.
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
Short-Term Trading in Options.
Friday Jan 7 2011
It looks like stocks are trying to pull back a bit. Look to take profits on options that expire in January. We think there will be another move up -- but caution is ALWAYS good when trading options.
Options Trading Scorecard (since 12/20/10):
| CGTS OPTIONS PORTFOLIO (Since 12/20/10) | Active | |||
| % Gain | 1/6/11 | Profit | Trades | |
| 11.76% | Options | $111,767 | 95 | |
SALES TODAY:
M2F ALT 14% Trading System: NVDA JAN 15 calls bought 12/29/10 @ .53. Sold today @ 4.3. Gain of 711.32%.
M5 3 AVG ASP DIFF Trading System. PCLN FEB 390 calls bought 1/3/11 @ 32.5. Sold today at 57.32. Gain of 76.37%.
M5 3 CHART Trading System. POL FEB 12.5 calls bought @ 1.6 on 1/3/11. Sold on 1/6/11 @ 1.5. Loss of 6.25%. Trading Signal gave a sell signal.
PURCHASES TODAY:
| THURS | CGTS NEW TRADES | ||||
| 6-Jan | |||||
| ISSUE | TRADING | CLOSE | SIGNAL | ||
| SYSTEM | |||||
| ARUN | T5 Turn (M4 Accum) | 23.75 | Long | ||
| ARUN FEB 23 calls | 2.12 | Long | |||
| PDLI | T5 Turn (M4 Accum) | 6.2 | Long | ||
| PDLI FEB 5.5 calls | 0.75 | Long | |||
| POL | T5 Turn (M4 Accum) | 13.35 | Long | ||
| POL FEB 12.5 calls | 1.5 | Long | |||
| SAH | T5 Turn (M4 Accum) | 13.26 | Long | ||
| SAH FEB 12.5 calls | 1.5 | Long | |||
| TXN | M5 3 ASP LT 2a | 33.25 | Long | ||
| TXN FEB 30 calls | 3.4 | Long | |||
| MWW | M5 3 ASP LT 2a | 25.27 | Long | ||
| MWW FEB 25 calls | 1.35 | Long | |||
| HLF | M5 3 ASP LT 2a | 69.2 | Long | ||
| HLF FEB 65 calls | 5.1 | Long | |||
| CLWR | M2F 14% Trade | 5.77 | Short | ||
| CLWR FEB 6 PUTS | 0.85 | Short | |||
| ECH | M4 Accum 00 | 75.38 | Long | ||
| ECH FEB 75 calls | 2.05 | Long | |||
| FDX | M4 Accum 00 | 93.1 | Long | ||
| FDX FEB 90 calls | 5.05 | Long | |||
| ARNA | M4 Accum 00 | 2.11 | Long | ||
| ARNA Feb 2 calls | 0.32 | Long | |||
| EDU | M4 ACCUM 00 14 | 105.23 | Long | ||
| EDU Feb 105 calls | 5.5 | Long | |||
| ARNA | M4 ACCUM 00 14 | 2.11 | Long | ||
| ARNA Feb 2 calls | 0.32 | Long | |||
| EWC | M4 Blank 2 | 30.83 | Long | ||
| EWC FEB 30 calls | 1.35 | Long | |||
| IRE | M4 Blank 2 | 2.48 | Long | ||
| IRE FEB 2.5 calls | 0.25 | Long | |||
| JJC | M4 Blank 2 | 57.52 | Long | ||
| JJC FEB 55 calls | 4.26 | Long | |||
| DBB | M4 Blank 2 | 24.3 | Long | ||
| DBB Feb 23 calls | 1.75 | Long | |||
| TXN | M5 3 Chart Trade | 33.25 | Long | ||
| TXN FEB 30 calls | 3.4 | Long | |||
| HLF | M5 3 Chart Trade | 69.2 | Long | ||
| HLF FEB 65 calls | 5.1 | Long | |||
| BIIB | M5 3 Chart Trade | 67.26 | Long | ||
| BIIB FEB 65 calls | 3.79 | Long | |||
| EDU | M5 3 Chart Trade | 105.23 | Long | ||
| EDU Feb 105 calls | 5.5 | Long | |||
| ICN | M5 3 Avg ASP Diff Sum | 26.18 | Long | ||
| ICN JAN 23.71 calls | 2.85 | Long | |||
| TXN | M5 3 Test Combo | 33.25 | Long | ||
| TXN FEB 30 calls | 3.4 | Long | |||
| RRGB | M5 3 Test Combo | 21.78 | Long | ||
| RRGB FEB 20 calls | 2.05 | Long | |||
| AMAT | M5 3 Test Combo | 13.89 | Long | ||
| AMAT FEB 13 calls | 1.12 | Long | |||
| AMTD | M5 3 Test Combo | 19.82 | Long | ||
| AMTD Feb 16 calls | 2 | Long | |||
| SNDK | M5 3 Test Combo | 52.73 | Long | ||
| SNDK Feb 50 calls | 4.9 | Long | |||
| EWG | M5 3 Test Combo | 23.56 | Long | ||
| EWG Feb 22 calls | 2.15 | Long |
___________________________________________________
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. Typically we work with the last close, if it falls between bid and offer. If it does not, then we average the bid/offer.
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