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This stock can easily move 10 to 15 dollars in a day. Today the swing has been over $13. Now trading at $699.28 you would have to be bullish that the stock is moving higher. Mar 18 is a long way out. The premiums are that high for a reason. It is not my “cup of tea”. I prefer more conservative trades but if you would own it at $680 and sell calls I can see your interest. Stock is trading at 32 times price to earnings so if you think it is moving back to old highs from the start of Feb then you are bullish. What about a spread selling the $620 for $3.00 and buying the $580 for $1.25. Earns $1.75 against $40 for 4.3% return. Might get a chance to close that one early but remember I am not a financial planner and can’t advise what is best for your trade.
Hi Mary
Just goes to show you that technical charting is all in the eye of the beholder. LOL. Thanks so much for posting your charts. As always they are appreciated.Excellent!
Yes it was a nice trade thanks to their good earnings.
Okay I found your post. Took me a bit to figure out where it was. I will find some articles for you and post the links this weekend.
I will get back to you this weekend on this.
You could consider a switch to the call side but use credit call spreads to cover the loss. Remember in a down market in correction you want to stay with spreads not naked unless you want to own the stock.
At $38 the stock is good value in my opinion. I’ll try to find time for a write-up for you.
Obviously buying the VIX index on Feb 1 would have been a good idea. LOL. I can’t seem to get back into this trade as it only dips for a day and then the volatility returns. Volatility has been steady since November making it difficult to time getting into this trade.
I wantto see what the stock looks like tomorrow and will decide then.
Excellent returns by all. My results were 56% and trade was closed by 10:15. https://www.fullyinformed.com/yahoo-stock-trade-ahead-of-earnings-returned-56-feb-3-2016/
Hopefully we get a rally in the afternoon. I think Yahoo will tumble after earnings.
Thanks for your praise. I tend to post most quickly to twitter but I cannot do real-time trading. If I did I would have to stop my website simply because real-time trading is time consuming. I am thinking instead of writing short comments to say things like “holding my trade” or that sort of thing to give some advice, but prices change quickly in options and trades are very fluid. But the goal of my website is to show what is possible through following strategies and learning how to apply trades, when to enter, when to hold, when to exit. Part of the reason my trade did well was the 5 extra positions I had and that I held just past the lunch hour although there were prices a lot higher than mine. In Microsoft I was out at 1:06 PM on the calls so I only held past lunch hour. I am working on trying for more communication, but it is time consuming to post quickly and often it takes away from another trade I am in. I make my living from investing, not the website so I guess I can only say I am doing the best I can.
I missed the Under Armour trade which was very disappointing, but I was writing a rescue for a member at the time and missed entering a trade. This week though I am looking forward to a couple of trades with Gilead Sciences in particular. I’ll keep trying to post as much as I can. I am glad the trade worked out well for you. 47% is a terrific return.Here you go Alan. Hope some of these ideas can help you make your decision. https://www.fullyinformed.com/members/stopping-the-bleeding-in-sdow-losses-investor-questions/
TeddiI find it depends on your broker. I would think if you do the short side first they will want to see the capital or available margin to cover the short trade. Once you buy longs to turn it into a credit put spread, the margin requirement should change to net the spread. I have done lots of trades where I am short a stock for weeks and then put in place a long put to protect it. My margin requirement reduces immediately when I do that. I would think all major brokerages are the same in this regard.
Your one minute chart looks like mine. Using the Ultimate Oscillator I bought spy puts at 11:39 when the UO reading was 86.80, 11:46 when it was 90.54, and 12:16 when it was 81.41 but also because at 12:16 the chart was pulling back and the reading was still above 80. Normally I want to see a reading in the one minute above 85 whereas 90 or higher is ideal. At 2:00 PM for example the reading was 87.07 and looking at the chart it probably would have been a good entry point.
For selling the 2:10 was 17.74 which was below 20 but you use your judgment on whether you think the market will fall further or whether you have enough profit. At 2:40 the reading is 17.40 and 2:41 is 13.27 which was right around when I sold 10 of my spy put positions out. 3:15 the reading was 19.96 which was when I sold another 10 spy puts out. The reading is still below 20 which is fairly negative, but the chart is what set that time period apart as an exit point. It was shortly after that, when I wrote I was buying a small number of calls for a bounce back. All in all, your chart looks good. You are looking for extremes to enter and then to a degree you want to use the general chart pattern to decide when to exit. I scale into positions and scale out of them. This helps a lot to assist for when the entry is too early. Often when I enter I see the signal such as at 11:39 but I wait for the chart to confirm the signal which is did not do at 11:39. However I tend to scale into a trade so if I bought at 11:39 and it was too early, I know I will be buying more as the market moves higher which will reduce my cost basis.
TeddiYour 5 minute chart chart matches mine. An investor could have started buying spy puts at 11:50. He could have sold at 2:15, 2:55, 3:15 to 3:20 using the 5 minute chart.
I have not got it up yet. I will hve it up this weekend.