Forum Replies Created
-
Posts
-
Intel Stock is certainly looking excellent again this morning. The stock is pressuring resistance at $32, but I think it will retest the recent lows. Here are some intriguing trade ideas I outlined this morning and what two of the trade ideas I will be trying to enter today. https://www.fullyinformed.com/intriguing-trade-ideas-for-june-11-2015-to-profit-in-intel-stock-intc/
Thanks for your reply. From here I think the key is to put in place a strategy to protect the position and work its way to a profit and out if your outlook is the GMCR has limited upside. I will post an article for you shortly.
Often the calls being bought are for a quick bounce trade. Usually when a stock like BMY drops this amount, option traders will aim for a quick bounce. As options are a wasting asset I prefer the stock trade which while not as profitable still returned a decent gain for the one day. Presently I think BMY is trying to test for a bottom.
Here is an article which discusses the perils of trading in stocks like GMCR which basically are one trick pony stocks. I hope this helps with not just GMCR but hundreds of such stocks. https://www.fullyinformed.com/the-problem-with-one-trick-pony-stocks-comments-on-gmcr-june-5-2015/
Thanks Jim
Nice write up. The big point is stock selection which you have outlined. GMCR is a tougher to trade because it really is a “one trick pony” as they say. They need a lot more product lines and a growing base of consumers. They do not have that. Instead we are seeing a saturated market. To get beyond that they need more product lines. This is why I stay clear of companies like GMCR.There are a number of support levels in GMCR. The problem you have is not using a stop-loss at the time of original entry, plus the stock was overvalued when you entered it. The next support is at $80 in the stock and you can see this morning a bounce back underway. Since you have shares you could consider waiting until Monday June 8 and then see where the stock is. Then consider selling calls far out of the money to help boost your return. If you look at the 5 year chart you can see that GMCR has had pullbacks before. What you want is to be in the stock during recoveries and not during pullbacks. Right now the stock is in a pullback. This is the time to be selling your calls while the stock tries to find a bottom. Once the stock commences the next recovery, you want to be back selling puts. At present there is no recovery and so stay clear of put selling for now. Hope this makes sense to you. I will have my article up for you shortly, but looking for support is easy when you look at volume.
I will have your article on GMCR rescue strategies up early next week. With the goal to get out of GMCR you want to watch further capital being risked.
Yes, the bounce I believe is just a one day bounce.
Thanks Thomas. My mistake. The trade details are correct and were based on June 11. I just typed the wrong date but the June 19 expiry is the one I sold and I like the $40 call strike. I believe it is pretty solid.
Hi Amy. In this market scaling into positions slowly often works in our favor. Here is my latest article on PKG Stock. I sold yesterday and again I sold more today. I will roll-down the $67.50 puts but only once the stock breaks that low. At present I have no plans to sell the $65 put strike. I like to stay flexible and time is on my side with this trade. https://www.fullyinformed.com/members/never-missing-an-opportunity-the-drop-in-packaging-corp-of-america-stock-pkg-may-29-2015/
Thanks for the questions. I am way behind almost always on posting to the portfolio. I try my best but it is tough to keep them updated all the time. To see what is active in a trade you can look at the individual trade through the portfolio. It lists the capital in use at the top of each stock trade.
There is not a list for open positions except through the portfolio itself which shows the latest update I have done below each title. I am considering letting tech support handle keeping the trades up to date but I am already paying them a lot for what they are doing. I don’t think I can get them to keep the trades up to date in the portfolio and afford it without raising membership prices and I don’t want to do that. My site is designed more for learning. I keep the trades as updated as I can to show strategies that are working. They are not really for trading purposes in the portfolio but to show that the strategies work and income can be earned. I will see if I can figure out a faster way to keep trades up dated in the portfolio. Thanks.Hi Valerie, Did you email me the details? Please let me know. Thanks
PG remains a great company with a great trading pattern. There should be further opportunities shortly. I will be posting as I move more capital into PG trades.
I do not follow CAH. I like the KO, and the UNH I would definitely be lower unless your goal is to own shares or if you are using the Walk That Profit Home To Momma Strategy. On Intel, support is at $30 so you can easily roll-down your $31’s.
Hi Amy, I am holding both the $80 put strikes and $77.50’s as well. I have more of the $77.50 than the $80. I would own the stock however and that makes quite the difference. However at this time I still like PG and think a break of $77.50 is unlikely.
Nie entry point. I am selling slightly higher doing the $122 put strike for now.
I am doing more of the Apple Stock Biweekly Put Selling Strategy today but staying around the $122 level mentioned in the article you referenced. Thanks for posting that link. If Apple Gets down below $120 I will be increasing my numebr of contracts.
The peg on a stock is not advising you what is considered reasonably safe. Make sure you understand a stock peg. Here from the optionistics own wesbite: The Peg is the strike price where the sum of the amount to be paid by all call and put writers is the smallest. This is the red line on the Daily History and Peg By Expiration charts. The peg changes as the ratio of open interest for calls and puts changes. The ratio of call and put open interest is measured in dollars.
The Bias is the point where the put open interest and the call open interest converge. It represents the direction where the Peg is likely to move based on small changes in open interest. A Bias that is higher than the Peg indicates the Peg is likely to rise and a Bias below the Peg indicates the Peg is likely to fall.
The chart is based on the premise that the majority of options are written by market makers and purchased by the public, that there is some ability of the market makers to influence the market, that market makers are not perfectly hedged and are eventually forced to roll hedges forward, and that no other significant market effects are driving the underlying stock. The accuracy of the chart increases as expiration approaches due to numerous factors including increased option volume, reduction of time premium in the option prices, and the necessity for market makers to roll hedges forward.
The strike pegger is more accurate for most major indicies and stocks which have large option volume and relatively low float. The Volatility Skew, the Put/Call Ratio, and the Strike Peg should all be evaluated. Correct interpretation of the Volatility Skew is most valuable, since it effects the accuracy of the Put/Call Ratio and the Strike Peg.
Understanding support levels based on volumes is far stronger for selling options. The most telling part of their statement is what you will find on every broker that offers pegging technical data namely that pegging is based on the premise that “that no other significant market effects are driving the underlying stock”. Be careful what you follow for advice. Support levels are far better. For example last week the peg on Apple stock was at $128 and then changed within a day to $125. Yet I have been writing for a while now how $125 is a support level and that is the level I am selling puts against. Pegging changes continuously so it depends on the day and if doing real-time pegging, it changes throughout the day. Support levels on the other hand stay steady until they are broken. They do not change from day to day.
TeddiGood comments! You could also consider trading covered calls against your Facebook Stock. The Hide and Seek Covered Calls strategy works well for this and if you are eveer exercised out, then you have your profit anyway, but until then you are earning extra capital while waiting for the stock to move higher.
My personal outlook is Facebook Stock will reach $100.00 at which point I will sell the few shares I bought after the initial public offering and the stock collapsed. I was surprised at how much the stock fell considering that no other company has this many subscribers tied to a social network. I still believe Facebook should be able to continue to grow and increase revenues which will increase shareholder value, but at $100.00 I will be selling out. The hide and seek covered calls strategy can be reviewed here: https://www.fullyinformed.com/members/hide-and-seek-covered-calls-strategy-to-avoid-exercise-of-long-term-stock-positions/
There are loads of other strategies. I could write a book on how to handle your Facebook shares. I for one have used the Hide and Seek strategy because it is simple and straight forward.Interesting to watch for sure Denis. The stock doesn’t meet my criteria but the stock pattern is very nice indeed.