Stocks Daily Discussion

[pftq]

EEE looking nice here as well - reminds me of EK, FMCN, AMR - lot of bounce plays lately.

The larger play was the bounce from last Friday, but it's also trending a small upward support right now if you want to channel trade it.  Bid is increasing nicely on level 2 as well.  I would just flip for 5 cents or so.

[pftq]

There's our end-of-day rally.
 
I'm probably going to keep holding calls into tomorrow, hedge little with puts (which are really cheap now).

[pftq]

Best straddle I've set up in a while.
SPY 124 calls averaged at $1, now $1.7
SPY 124 puts averaged at $.70, now $.65

Slightly heavier on the calls side.  Of course, it required me sitting here all day and timing these orders though (usually have class -_- ).

[pftq]

Out of calls at about SPY 125.30 - we just broke the upward trend from yesterday afternoon; holding puts and will wait to see how far this next pullback goes.

[pftq]

Out of puts and into a fresh set of 125x calls at SPY 124.60

This is the support I'm looking at right now.

[pftq]

Just noticed that all the major overnight gaps occured during bollinger pinches on the 30-min scale.  This is going to be useful for picking which days to open straddles on (today for example, no real gap in either direction).

[pftq]

Picked out some puts at the top of today's wedge to complete my SPY 125x straddle - going to see if the bollingers are good for predicting a strong gap for tonight.

Edit: Ugh, I'm an idiot.  I'm betting long and I hedge w/ puts mid-day before anything happens.  Sigh, SPY breaking 125 now.  -_-

[pftq]

SPY at 126.10 now - totally called it. Now I just need to listen to myself and not try to hold calls through resistance...

Thinking the next resist here is the 126-128 we had during the brief rally above the Aug-Sept. channel.
Exited most of my earlier calls (too deep in the money now to increase that much more) and picked up a few 126 SPY calls.  Will add more at end of day so I get less options decay.

[pftq]

Out on calls.  Market usually dips mid day so I'm waiting for that to exit on the hedged puts.

Also looks like the bollinger bands worked great for predicting today's gap.  Right now it looks like we won't get another pinch for a day or two, so I'm going to wait till next week to set up another straddle.  I might play pure calls/puts here and there though, we'll see.

[pftq]

Just thought I'd share and outline the strategy I've been using the last few weeks to profit on the market no matter what direction the market goes.  That and incase I forget because I tend to forget what I say in the middle of the week. 

This is almost a win-win strat IMO so feel free to use it yourself (and let me know how it goes ).

Options Straddle on Volatile Markets
I'm mainly buying both calls and puts to form what's called a "straddle."  Basically you can lose 100% on one side but you count on the other going >100%; the best part is you don't have to care what direction, just the magnitude of the move.  For the index, I choose either SPY or FAS, depending on where I think the focus will be (read the news); SPY is general market while FAS leans toward financials.

This is a summary of the technical analysis I go through to set up the straddle:
- Check 30-min bollinger bands for pinch to see what days will gap. (last few weeks, it's pinched mid/end day and then gapped that night).
- Buy equal positions (in dollars, not contracts) on ITM calls/puts at end of day because decay eats up a lot during sideways movement intraday.
- Sell next morning, often at about 10:30-10:45am EST.  After 11am EST, market usually dips or trades sideways until ~3pm EST.

It's worked very nicely for me so far.  Usually count on the overnight gap being big enough for one side to go >100%.  If not, the losses are pretty small also (if the market doesn't gap enough or trades flat).  But just make sure to follow the strat consistently; I've had a few times where I was tempted to go long or short mid-day only to get the options much cheaper near the end of day (because of decay). -_-

(Notice the bollinger bands pinch on exactly the days there will be gaps, whether up or down.)

[pftq]

Into GMCR 65x calls at $0.25

Going to buy SPY calls when it dips later today; we broke last week's high, so we should have room to move towards 128-130.

[pftq]

Also, just to confirm this strategy works, if you set up the straddle last Friday with 125x calls and 126x puts (both ITM), you'd be up 60% on the calls right now and down 53% on the puts.  This is also assuming you buy/sell them at the same time and didn't time the puts better (ex sell at open before market rises 10:30-ish).  Bollingers weren't much of a pinch on Friday (which was why I didn't hold anything), but it's nice to see this still gives modest gains.

Just thought I'd share and outline the strategy I've been using the last few weeks to profit on the market no matter what direction the market goes.  That and incase I forget because I tend to forget what I say in the middle of the week. 

This is almost a win-win strat IMO so feel free to use it yourself (and let me know how it goes ).

Options Straddle on Volatile Markets
I'm mainly buying both calls and puts to form what's called a "straddle."  Basically you can lose 100% on one side but you count on the other going >100%; the best part is you don't have to care what direction, just the magnitude of the move.  For the index, I choose either SPY or FAS, depending on where I think the focus will be (read the news); SPY is general market while FAS leans toward financials.

This is a summary of the technical analysis I go through to set up the straddle:
- Check 30-min bollinger bands for pinch to see what days will gap. (last few weeks, it's pinched mid/end day and then gapped that night).
- Buy equal positions (in dollars, not contracts) on ITM calls/puts at end of day because decay eats up a lot during sideways movement intraday.
- Sell next morning, often at about 10:30-10:45am EST.  After 11am EST, market usually dips or trades sideways until ~3pm EST.

It's worked very nicely for me so far.  Usually count on the overnight gap being big enough for one side to go >100%.  If not, the losses are pretty small also (if the market doesn't gap enough or trades flat).  But just make sure to follow the strat consistently; I've had a few times where I was tempted to go long or short mid-day only to get the options much cheaper near the end of day (because of decay). -_-

(Notice the bollinger bands pinch on exactly the days there will be gaps, whether up or down.)

[pftq]

GMCR 65x calls at $.39 now, +50% from this morning.

Into GMCR 65x calls at $0.25

Going to buy SPY calls when it dips later today; we broke last week's high, so we should have room to move towards 128-130.

[pftq]

30-min Bollingers pinching today so I'm going to go for another straddle near close.

Been watching the wedge form for today and adding calls near the bottom of it.  Added a few puts at the top, but I honestly think we're going to break upward on the wedge so I'm waiting for that to get the puts even cheaper.

[pftq]

Was slowly adding to more puts as SPY ran up toward 127 but stopped.  Think I'm just going to have a slightly heavier call side vs puts (which were entered cheap).  Doesn't really make sense to still go equal calls/puts if I'm expecting us to move up.  I might add a few at end of day instead if we move a lot higher and the puts are just dead cheap.