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Day Trading Options
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Day Trading Options

  #11 (permalink)
Trading for Profit
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Day Trading Options

GOOG offered a nice opportunity to go long or for those of us who like options, buy call options at the close of 4/25/11. Using my CCI countback method, you will see just how successful the trade has been. Although I am showing more than on strike price and it is obvious the lower cost would have been the best when trading with the same money, I choose the option closer to the money for higher % win rate and certainly have no regrets, but I did not get out at the high of $13.60, using the 10 min count back bar on the CCI, took me out at $13.50 @ 10:40AM. Try and beat that with any other system. See the charts to see the entry and try on demo and perfect what I love.
WK

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  #12 (permalink)
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Day Trading Options


ESFXtrader View Post
GOOG offered a nice opportunity to go long or for those of us who like options, buy call options at the close of 4/25/11. Using my CCI countback method, you will see just how successful the trade has been. Although I am showing more than on strike price and it is obvious the lower cost would have been the best when trading with the same money, I choose the option closer to the money for higher % win rate and certainly have no regrets, but I did not get out at the high of $13.60, using the 10 min count back bar on the CCI, took me out at $13.50 @ 10:40AM. Try and beat that with any other system. See the charts to see the entry and try on demo and perfect what I love.
WK

FOR SOME REASON, the chart did not attach. Here it is.

Attached Thumbnails
Day Trading Options-goog_option_trade_as_of_4-29-11.png  
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  #13 (permalink)
Trading for Profit
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Day Trading Options


The following are examples of the new thread I intend to start soon:

UAL @21.66 Buy @ $1.53/2.44/.91 Sold @1.74
UAL 110618C20 3.41 3.25 3.30 70 today
UAL 110521C22 1.40 1.37 1.40 666 today

PAY @$53.50 Buy @ $4.37/7.47/3.10 Sold @ $4.69
PAY 110618C48 8.20 7.90 8.40 53 today
PAY 110521C52.5 3.50 3.40 3.60 214 today

SLW @$39.77 Buy @$3.28/5.51/2.23 Sold @3.65
SLW 110618C36 6.30 5.95 6.05 39 today
SLW 110521C40 2.57 2.47 2.50 1,751 today
You will see columns of last, bid, ask, and volume following the symbol of each trade.
The object is to buy ITM options futher out and sell ATM or OTM options to cover much of the cost of the option purchased. Two ways to win. ITM option has a higher Delta and moves more quickly with symbol price in my expected direction. Theta causes the sold option to lose value more quickly than the option with more time. I close most trades 3 to 6 days after opening with 6% to 12% gains. The highest has been 40% in under 3 weeks. The above trades were held only 2.5 hours, 2, & 3 days for 11%, 6.35%, & 9.94% including the cost of commissions. These are very low risk trades and are best not taken before news or earnings report of traded symbol. Out of the over 50 trades taken, only 2 have not been winners.
As noted, I have closed several on the day opened and most never go in the red more than .10.
These are the last 3 trades taken. Hope I can get to more on this soon. This should wet your appetite.

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  #14 (permalink)
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Private Message: "Just read your options thread.. How would you recommend me learning to buy/sell opts? Any good resources?
Have you ever thought about teaching someone?"

I have not only considered it but tried to teach some family members and others. The problem is that they must truly want to learn and willing to listen to their dad, brother, and/or uncle. I have also tried to teach some in our church and where I worked. Most won't take the time and get comfortable with the charts to really give themselves a chance to learn. One needs to understand charting, stocks and/or ETF first. Then they can learn options. If you google option trading and variations of that, you will find many sources to learn option trading. I learned from Optionetics at a 2 day seminar. I have repeated it free as we have that right. I love to buy ITM options a month out and sell ATM options of the current month to pay for much of my cost. I seldom go wrong and frequently sell in 1 to 3 days with 6% to 12% return. That is not bad with my consistency and the very low cost of commissions at Trade Station. The commissions must be taken into effect, as they can add up quickly at some brokers. I pay $1 per contract, so my cost is $4 per contract per trade. You do know that if you buy an option, you must sell it; and if you sell an option, you must buy it back. So, a spread is the purchase and sell of an option at the same time. Generally, one closes both sides of a spread simultaneously, but that is not necessary. The way my trades work, the two options move together for a while, especially when the market moves against my plan. I have seen the price move $4 against me and the options were in tandem. Then it turned my direction and quickly made my a nice 12% return in only a few more minutes. Getting back to legging into or out of a trade. You can buy back the sold option first and sell the one you bought at any time. A good time to do this is after the price goes against your trade. The price of the short option or sold option is low and can often be bought for less than half of its credit to you. Then, as the price of the stock/ETF moves in your direction, sell the long option or bought option. You can see great success using this method with smaller accounts, where you hold the trade overnight and day trade to leg out of the spread, or if you prefer, leg into the spread. I use the CCI method I have described in the TF, FX, and Option threads. Hope this gives you a start. It works for me. www.optionetics.com has a lot of helps. Good luck and good trading.

WK

Attached Thumbnails
Day Trading Options-aapl_put_trade_on_5-5-11.png  
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  #15 (permalink)
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Day Trading Options

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  #16 (permalink)
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Day Trading Options

Another Private Message: Re: Options
I want to learn!
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I checked out Optionetics.

NFLX @227.67on 4/11, I opened a Diagonal Put spread @$5.93/20.91/14.98
Buy:NFLX 110618P230 and Sell:NFLX 110521P225
Had you closed near the open the following day as I did, the trade was at $6.40 and had a gain of 7.2% including commissions. It Sold for $6.20 on 5/2.
NFLX peaked $254.98 on 4/25/11 and the spread trade was only at a loss of .45 to .80 max at $5.50 to $5.15 spread. And from $6.95 to $7.05 (about 17% gain) today with the price of NFLX up almost $12 against the trade. What other trade can you put on where the trade goes against you $27.31 and you lose only a max of $80 a contract.

Check out LULU in which I also placed a Diagonal Put spread with the price at $89.89 as seen on the screen shot below. The spread was sold for a 3% gain before the big move against my trade. Now the price is at $98.80 and the spread is at $2.75 from $3.61 purchase. With the price $8.95 above my put option purchase and therefore against my trade, the spread is only at a loss of .86 or $86 per contract.
Hope this helps you see just how well these diagonal trades work.

WK

Attached Thumbnails
Day Trading Options-nflx_dia_put_spread_on_4-11-11.png  
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  #17 (permalink)
Trading for Profit
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Diagonal spread-credit

This VXX spread is a credit spread I picked up and closed today for a credit of .22
Although the margin of $100 could be considered an expence, it really doesn't work like that on the diagonal spread. Since this was a credit, there was no up front cost, and therefore, it is hard to figure the % gain. The main thing here is that you add the .04 to .22 for a total gain of .26 or $26 per contract traded.
The spread was put on for a credit of .04 .04/$1.00/1.04
The spread was placed on 4/6/11. I expected the VXX to continue plumiting after the bounce up near the 31EMA.
The margin is $100 (100X$1.00-difference between stricks) per contract, as these are call options and the long option, as seen below, is at a strike price of $26 and the short strike price is at $25, which is .30 in ITM when the trade was placed. The trade worked perfect and the short option lost money quickly, as it expires tomorrow, while the long option has another week.
This is another way to use the diagonal spread trades. I have not had one of these fail to work. They have been low credit from this .04 to .30 and worked the same. To get the hang of these, copy the option chain as I did and watch the price of trades you expect would work and see for yourself how well it does. Those with smaller accounts need to consider the margin.
After you understand all I have written and see how the price of options move with the time laps and price of stock, then you can trade live for a nice profit. Good trading. Hope this helps.
WK

Attached Thumbnails
Day Trading Options-vxx_diagonal_spread_trade-credit.png  
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  #18 (permalink)
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Great Thread

It's great to have diverse threads on futures.io (formerly BMT).........

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  #19 (permalink)
Trading for Profit
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Posts: 505 since Jul 2010
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Options Check List

http://topgunoptions.com/blog/wp-content/uploads/OPCL-FINAL.pdf

This consicely describes some of what I learned with Optionetics.
The URL is a very thorough discription of the many types of option trades, what to look for in the markets, and how to always manage your money with low risks.
The following is a glimps of what is inside:
Planning: The Planning Guide
Purpose: This planning guide is intended to give a trader a logical sequence for trade
planning. Reference the Top Gun Options ’ Glossary for specific terminology.
1. Target:
a. The underlying asset that is being considered.
2. Strategic Mindset.
a. Bullish, bearish, neutral or volatile.
b. Determined by fundamental analysis, technical analysis and volatility (VIX
and IV vs. HV). .........


http://topgunoptions.com/blog/
or
http://topgunoptions.com/tgo


Matt Buckley - a.k.a. Mr. Broken Wing Butterfly - or as he likes
to describe himself: 'The Knuckle Dragging Option Trading Caveman' -
just posted a new trading video on what he's doing right now with options
to generate 16% a month.
His story is found on this long video, but it does not describe his technique. If you sign up, you can get his emails that will offer more info later. I am not affiliated with him and have not joined his service, but have downloaded the “free” Options 'Pocket Check List' seen above and thought some of you might be interested in doing the same. I thought it necessary to include this info if I gave you the access to the free check list. It can help learn and perfect your trading no matter what type of option trader you are or become.


This is the response for the request of the Opition Pocket Check List:


Hi Fellow Trader,

Thanks for your interest in getting my OPCL (Options Pocket
Checklist).


I put a lot of time and effort into this, so you should
definitely print out a copy and keep it handy as a reference.

(It is modeled after the same pre-flight checklist I used to
refer to before getting in a $50M F/A-18 Hornet and launching
on a combat mission

Trading is Combat - I always say...And that is especially
true with Options.

This Options Checklist can save your life if you use it...

Ignore these key concepts, and you will get killed in the
markets.




To your success !!!!!!!!
WK

Attached Thumbnails
Day Trading Options-planning__tactics_guide_.png   Day Trading Options-primary_options_tactics_ref_table.png   Day Trading Options-intermediate_options_tactics_ref_table.png   Day Trading Options-advanced_options_tactics_ref_table.png   Day Trading Options-broken_wing_butterfly-call_options.png  
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  #20 (permalink)
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Options Check List


The last screen shot should have looked like this one below.

Attached Thumbnails
Day Trading Options-broken_wing_call_butterfly.png  
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