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Using Options for Swing Trading


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Using Options for Swing Trading

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  #101 (permalink)
Market Wizard
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GLD gapped higher today. Because the delta for the $124 long puts is so much higher than the $119 short puts, my profits took a beating. $500 or so in profits evaporated just like that. There will be more trades in the future though so I cannot complain. Time decay will increase as the week progresses for the short puts as well so as long as GLD doesn't start rallying, I will slowly start bringing in profits again. Here is how I am managing the position now:

Test of the resistance level on GLD. It held nicely so far. Might get tested again shortly.


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  #102 (permalink)
Market Wizard
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Glad I bailed on that trade as the stock has been heading lower ever since. Looking for the trendline to be tested soon. Hoping for a pullback to $3.30 so that I can set a $0.15 stop around $3.15

Entered 12 Nov $2.5 Calls on DRYS


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  #103 (permalink)
Market Wizard
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Bermudan Option View Post
Stopped out of National Bank of Greece stock (NBG)


The price action didn't go beyond my stop out point, but the spread was too wide and I couldn't hang on to support being tested/broken without having substantial slippage.

Nothing like a stop out before a gap and run higher haha.



I can take comfort in the fact that the trade idea was right overall. Will make money off of trades like this in the long run so no point in fretting about this unlucky one. Stop was tighter than it should have been if regular price action made me tap out anyways.

Edit: Also, I have to mention that this was a nickel-wide spread. That is not my bread and butter. Basically, for nickel-wide spreads, each tick on the option chain is worth $0.05 instead of a penny. There is a lot of slippage involved as well as wide, illiquid BxA spreads so they are terrible for setting stops or when the market is going against you and you want to bail. I completely removed nickel-spreads from my trading to avoid slippage but I just couldn't pass up on the NBG chart. I will relegate trading nickel spread to only being in my IRA account were liquidity is less of a concern. Looking to trade NBG in there in the future.

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  #104 (permalink)
Market Wizard
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Test of the resistance level on GLD. It held nicely so far. Might get tested again shortly.


GLD is recovering nicely from the gap higher. Looks like the move is being faded nicely:
(Removed the P/L shading since it no longer has any bearing on the trade)


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  #105 (permalink)
Market Wizard
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Split the BxA on Nov $5 Calls on SD





Hoping for a breakout in the near future based on this overall pattern on the Daily:



Current Positions
BRCD
MCP
GLD
DRYS
SD

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  #106 (permalink)
Market Wizard
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Trying my hand with some BRCD calls again:


Took 5 contracts off the table earlier today. The weird/funny thing is that I split the BxA on the option @ $1.41 at the high of the day that didn't get filled when I entered it. The stock pulled back like 4 cents and someone bought it off me. Talk about paying premium for premium lol.


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  #107 (permalink)
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STP blew past the level I thought would hold. Here are my new expectations:

I restructured my expectations for STP a bit more. I want to buy at the bottom of the shaded level on the quoted image above. I was looking for a full retracement to the trendline, but based on the price action when I zoom out, supply might dry up around the $1.30 level as well. I am going to be watching volume as the market moves tomorrow. If I see buying volume coming into the equation, I will be looking to buy with a stop around $1.15. The closer the stock gets to $1.15 beforehand, the more options I can buy. I am hoping for a huge retracement obviously lol, but I don't want to potentially miss out on a chance to buy the dip either. Here is the updated (Daily) chart:

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  #108 (permalink)
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I am going to get smoked @ the open. MCP announced lower revenues than anticipated and a secondary stock offering. Stock down 20% on my DITM options

Edit:


Closed my position down a grand. Weirdly enough I am pretty much unphased. It is the nature of the market I suppose. Gotta take the good with the bad and I understand that an Secondary offering is a low probability occurrence so that was just bad luck and move to the next trade. Speaking of which...

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  #109 (permalink)
Market Wizard
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Bermudan Option View Post
I restructured my expectations for STP a bit more. I want to buy at the bottom of the shaded level on the quoted image above. I was looking for a full retracement to the trendline, but based on the price action when I zoom out, supply might dry up around the $1.30 level as well. I am going to be watching volume as the market moves tomorrow. If I see buying volume coming into the equation, I will be looking to buy with a stop around $1.15. The closer the stock gets to $1.15 beforehand, the more options I can buy. I am hoping for a huge retracement obviously lol, but I don't want to potentially miss out on a chance to buy the dip either. Here is the updated (Daily) chart:

Grabbed some STP calls and faded the gap lower to start the day.




So now, even if there is a selloff, the main trendline will have to be broken prior to me being stopped out

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  #110 (permalink)
Market Wizard
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Grabbed some Nov $18 Calls on APOL a few minutes ago:



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