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Using Options for Swing Trading


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Using Options for Swing Trading

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  #11 (permalink)
Chicago, Illinois
 
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I've been doing some thinking about my accounts and I am still trying to figure out how to effectively use my ThinkorSwim account because commission is too high for lotto plays that often have +25 contracts. Here is the new breakdown of my different accounts:


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  #12 (permalink)
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Hell of a day today. I am extended to the long side but I have some technical setups on fundamentally unsound companies as well.

Anyways here is an update on CIM going into tomorrow:

I entered this trade on an ascending triangle on the weekly. Right now, I am looking at another ascending triangle but on the hourly/65m timeframe instead. I think it might be do or die time here. Well maybe not die, but the stock might retrace if it doesn't break and hold above resistance

I am currently up 100% on all of the calls. Taking a profit here hasn't crossed my mind yet because I didn't come into this play attempting to risk $1 to gain $2. If this breakout fails, I might take some risk off of the table though.

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  #13 (permalink)
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Hey everyone, hope your trading week is going well. Just a quick update to throw out there along with a trade I am involved in and a trade I am interested in.

Last week ended strong and I was able to take advantage of it. Looking at my portfolio though, I am extremely overweight in Financials. It is kinda something I did on purpose because I think the sector has the most room to go higher, but also because so many of the charts in the sector are bullish. Over 1/2 of my portfolio is in Finance right now. I have more positions I want to put on in the sector this week but I am also focusing on the Nasdaq-related stock potentially bouncing back this week. AAPL has done terribly and Friday's close is still bullish for the sector. That says a lot about the overall strength of the benchmark. I am specifically looking @ Semiconductors as well because they were lagging the January rally but are starting to show signs of life and they are volatile once they get moving.

With the way the market is going, luckily there are not a lot of trades that I am in that aren't profitable. However, here is one:
BIG (Big Lots)

I am hoping that there is a fill of the previous gap lower sometime soon.

NTAP is a trade I might get involved in next week if it gets going as well:
It is consolidating around a key resistance area on the Daily timeframe:


If you look @ a shorter timeframe, the hourly shows that there is a symmetrical triangle formed:


Will have my eye on a potential break higher this week

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  #14 (permalink)
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Bermudan Option View Post
Hell of a day today. I am extended to the long side but I have some technical setups on fundamentally unsound companies as well.

Anyways here is an update on CIM going into tomorrow:

I entered this trade on an ascending triangle on the weekly. Right now, I am looking at another ascending triangle but on the hourly/65m timeframe instead. I think it might be do or die time here. Well maybe not die, but the stock might retrace if it doesn't break and hold above resistance

I am currently up 100% on all of the calls. Taking a profit here hasn't crossed my mind yet because I didn't come into this play attempting to risk $1 to gain $2. If this breakout fails, I might take some risk off of the table though.

Update on CIM:

The market didn't breakout right after the ascending triangle, but soon after. It consolidated higher for a bit and then pushed higher.

I didn't 'take profit' per say, but since the options are 3x the price that I bought them at, I sold 1/3 of my position for the price I paid to establish the entire position. So the 50 remaining contracts are all profit and the worst I can do is get out at breakeven.

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  #15 (permalink)
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Last week was a rough week. Stopped out of trades in OXY (x2), FCX, BIG, KSS and MS

OXY: I entered this trade because /CL looked primed to breakout on the weekly. I failed to take into account that the Weekly chart means the breakout can happen today or a month from now. My stop was waaay too tight and I did not wait for confirmation before buying. Ahhh welll

FCX: Had a terrible entry back in January. The underlying rallied recently but I was stopped out last week on a pullback because the options expire this week so time decay has increased rapidly

BIG and KSS: Both of these trades were based on the retail sector as a whole looking bullish. However, the retail #s revealed in January disappointed and the whole sector sold off. The sector has rebounded since then, so if I owned the stock I would be at breakeven. However, these were front-month options and I don't have the ability to stay in the trade that long. Got stopped out for a $200/$300 loss on each of them

MS: Rallied 3% when I entered but pulled back since then and I got stopped out. I am still bullish on the financial sector, but I have trades in other stocks right now (CMA/BK/CIM) and a few on the watchlist (FITB and C)

Current Positions
BBT: Consistently below VWAP and doesn't look like it has the legs to move higher. Looking to get out on a break of key support or on a low volume rally higher
RF: Sitting on hands for this one. Not much to be done here. Currently sitting on top of the monthly VWAP. Slowly putting in higher lows but having real issues w/ the $8 level
CMA: Has been trending since I entered the trade. I will stick to trendline on the 30m to manage the position
LRCX: Will use the trendline on the 30m starting 1/25 to manage the position. Hasn't moved since the day I entered the position but semniconductors will hopefully turn from laggard to leaders as the QQQs are showing strength in the last week or so.
EXC: Trend is bearish but too much time left to close out the calls. Will let them expire worthless more than likely or buy them back @ $0.05 when it looks more dire
HNZ: Rangebound. Nothing really left to do except wait until the ER. Not a huge fan of this trade at all. I did not trade my setup here.

Notes about last week
I had a gameplan going into of the week, but I completely forgot about it as soon as Monday morning rolled in. I thought the market was over, and anticipated a move lower/sideways, but I didn't enter a single short or manage my open positions more aggressively. I will be better prepared for the future

Been busy but I will break down some trades in more details. I got a lot of ideas and insight from the board this past weekend, and I need to document my journal better to get better and to eventually give back to the community. One of the main things I will be doing this upcoming trading week is determining what type of trending/non-trending day it is, and trading accordingly.

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  #16 (permalink)
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No trades executed yet but man it feels like a good day of trading already in terms of managing expectations and risk based on trend (or non-trend)

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  #17 (permalink)
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Bermudan Option View Post
Current Positions
HNZ: Rangebound. Nothing really left to do except wait until the ER. Not a huge fan of this trade at all. I did not trade my setup here.

Well fellas. Sometimes it is better to be lucky than good:

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  #18 (permalink)
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Nicely done

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  #19 (permalink)
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Thanks Mike.

Today I am looking to potential day trade AAPL. Today is OpEx so the delta is extremely high and volatile. I can wield a lot of power with a little bit of money but my stops have to be razor thin because whatever is out of the money is entirely worthless @ the end of the day


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  #20 (permalink)
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Prior to that big winner, my account had suffered like a 30% drawdown. I have decreased my size for now and I'm focusing on strengthening my foundation. Because the markets have been grinding lately, I am focusing on scalping with In-the-money weekly options. It is a work in progress, currently I am only putting $150 in a trade and cutting losers short ASAP.

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