Hi there once again.
We have had two more triggers today in UA and NFLX. They are now very much oversold (which is great for us) due to profit taking. It is earning season, so we will watch closely to see how they recover from this, but there could really be some big bucks to me made from these two trades. They have been consistently trending higher over the last few months - and these are very tradable charts. Getting into the action just after earnings can be a very difficult thing to judge, but happily my triggers and confirmations will give us the direction to place our trade. IRM is still not tradable - yet! I am still awaiting confirmation that it is going to go in the right direction - hopefully it should be sooner rather than later, or else we will have to take it off the trigger list and wait for something else to happen!
IWM is offering an interesting scenario - It has hit resistance and rebounded... I am very nearly tempted to play a put play here over the next couple of days. There could be some cash to be had here - even if it is a modest 10-20% gain. Do I want to risk it??? The trend line is going higher, and it is not in my main strategy - however it is a strategy we could play... I think I am passing, and we will see what happens if it hits the resistance again. If it breaks through, I will probably buy because it is trending upwards. Because it is trending upwards makes me nervous about buying a put at this time.
Anyway, a couple more stocks have been added to the watch list, and it currently looks like this:
RS:
BIDU
MELI
SINA
PCLN
FOSL
ULTA
MWIV
IPGP
WLK
DECK
PII
ALB
SRCL
UA
NFLX
INFA
SFLY
TPX
CHSI
NEU
SHS
KRO
CACC
AGP
LS:
MMSI
FMCN
BJRI
IRM
SLGN
PTEN
CPHD
CEVA
IL
CROX
GIII
CPX
RES
ANN
FARO
TIBX
LTD
LXU
RAX
HS
Happy trading. Let's wait to see what happens in the next couple of days and we may have a trade.
Wednesday, April 27, 2011
Tuesday, April 26, 2011
Another day cometh!
So we are in on Tuesday after a longer than usual weekend, which was also much needed.
Not much has really gone on in the market place over the last few days - with it being Easter and bank holidays and the such like, however, we have got some new stocks on our watch list. This increases the amount of stocks we are looking at to 38, and also we have our ETF's on top of this.
Our watch list is broken out like this:
RS Strategy:
LULU
BIDU
MELI
SINA
PCLN
FOSL
ULTA
MWIV
IPGP
WLK
DECK
PII
ALB
SRCL
UA
NFLX
INFA
SFLY
TPX
and LS:
MMSI
FMCN
BJRI
IRM
SLGN
PTEN
CPHD
CEVA
IL
CROX
GIII
CPX
RES
ANN
FARO
TIBX
LTD
LXU
RAX
These are all looking like bullish plays at the moment. The only one which has had a trigger for the trade is IRM (still). I am still awaiting confirmation before I enter a trade though. This will come quite soon, although I have said, that if a trade does not present itself, then I will not jump into one... That is the traders rules... and we stick by it!!!
Our ETF's are not providing any interesting trades as of yet, and as predicted, the DIA is starting to retrace a little after swinging from over sold to over bought in about a day... As I did say, not one to get into unless you were only looking for a couple of dollars gain (if you could pick the options up cheap, it might have been worth a gamble) but not for me!
ETF's:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
Anyways, look out for tomorrows update, and we will see where the markets are taking us.
As I mentioned, we are looking at bullish plays at the moment. All the stocks are trending upwards, so we have to wait for a retracement before entering a trade with the trend. Short term trend will go down - that is fine, but we are looking at the longer term trend, and looking to trade between a day to a couple of months max (and that is only to milk the trade for as much as possible without any extra risk). So it seems like we are getting lots of potentials, but no trades- this is actually a good thing. This is because we know that the stocks being picked for our watch list are really really good potential stocks that are consistently trending upwards with steady buying. Profit taking occurs for some, so the stock dips which is where we get in. Once the selling finishes, buying starts again, with us getting on the ground floor of the move (or at least the first floor!) ready to escalate our profits higher (really could not get away from the pun!)
Due to the watch list being very new, I have not got some leaders in the market - YET! Stocks like Apple and Amazon, could easily be put on, but I want to keep the watch list 'fresh' so only approved stocks are on there... not Pre-approved if you get my meaning!
Market update:
NYSE 168 new highs 10 lows
NASDAQ 119 New highs 13 lows
AMEX 16 new highs 2 lows
You can see that the markets are pushing upwards at the moment, so these bullish potential stocks are there as a reflection of the markets themselves!!!
Not much has really gone on in the market place over the last few days - with it being Easter and bank holidays and the such like, however, we have got some new stocks on our watch list. This increases the amount of stocks we are looking at to 38, and also we have our ETF's on top of this.
Our watch list is broken out like this:
RS Strategy:
LULU
BIDU
MELI
SINA
PCLN
FOSL
ULTA
MWIV
IPGP
WLK
DECK
PII
ALB
SRCL
UA
NFLX
INFA
SFLY
TPX
and LS:
MMSI
FMCN
BJRI
IRM
SLGN
PTEN
CPHD
CEVA
IL
CROX
GIII
CPX
RES
ANN
FARO
TIBX
LTD
LXU
RAX
These are all looking like bullish plays at the moment. The only one which has had a trigger for the trade is IRM (still). I am still awaiting confirmation before I enter a trade though. This will come quite soon, although I have said, that if a trade does not present itself, then I will not jump into one... That is the traders rules... and we stick by it!!!
Our ETF's are not providing any interesting trades as of yet, and as predicted, the DIA is starting to retrace a little after swinging from over sold to over bought in about a day... As I did say, not one to get into unless you were only looking for a couple of dollars gain (if you could pick the options up cheap, it might have been worth a gamble) but not for me!
ETF's:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
Anyways, look out for tomorrows update, and we will see where the markets are taking us.
As I mentioned, we are looking at bullish plays at the moment. All the stocks are trending upwards, so we have to wait for a retracement before entering a trade with the trend. Short term trend will go down - that is fine, but we are looking at the longer term trend, and looking to trade between a day to a couple of months max (and that is only to milk the trade for as much as possible without any extra risk). So it seems like we are getting lots of potentials, but no trades- this is actually a good thing. This is because we know that the stocks being picked for our watch list are really really good potential stocks that are consistently trending upwards with steady buying. Profit taking occurs for some, so the stock dips which is where we get in. Once the selling finishes, buying starts again, with us getting on the ground floor of the move (or at least the first floor!) ready to escalate our profits higher (really could not get away from the pun!)
Due to the watch list being very new, I have not got some leaders in the market - YET! Stocks like Apple and Amazon, could easily be put on, but I want to keep the watch list 'fresh' so only approved stocks are on there... not Pre-approved if you get my meaning!
Market update:
NYSE 168 new highs 10 lows
NASDAQ 119 New highs 13 lows
AMEX 16 new highs 2 lows
You can see that the markets are pushing upwards at the moment, so these bullish potential stocks are there as a reflection of the markets themselves!!!
Thursday, April 21, 2011
One more potential trade- watch this space!
So, another day, another potential dollar.
The watch list is growing quite dramatically, and I am wondering whether to put some more ETF's on there, to include the gold and oil indexes. The reason being is that unless you live in a cave, you will know that they are both trending upwards, and Gold is consistently touted as being as high as it has ever been.
The ETF's are great to trade options on, because the options are both affordable, and you have strike prices that are only $1 apart. This is very important for our second strategy (LS) as it brings the tied up margin down to only $100 per contract, and your profit return is much greater. I would rather get a $20 return from $100 margin than a $40 return from $250 margin... after all I could just buy 2 contracts at the $20 giving me a $40 return from $200 (25% return for 1 contract of $100 margin, rather than a 19% return from the 1 contract of $250 margin). Any way, I digress...
The blog posts will start to get shorter as I concentrate on the good stuff... the trades and the options to be bought.
The watch list has pretty much doubled today - which is great, as it gives us far more potential trades to go through with. If we get too many trades, it means we can just pick out the really good ones. I.e the ones that we think will give the biggest returns or the ones with the least risk.
So our updated list today:
MMSI
FMCN
LULU
BIDU
BJRI
MELI
IRM
SLGN
SINA
PCLN
FOSL
ULTA
MWIV
IPGP
WLK
PTEN
CPHD
CPX
CEVA
DECK
PII
IL
CROX
Out of these we have had another trigger in IRM. This stock is now way overbought. This is on the LS strategy, so once we get confirmation that this is a viable trade (which we will probably get by today's close I predict) then we will look to do a credit spread. So this will be fixed risk, and we will be getting credited straight away with the cash!
The ETF's are:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
The DIA finally gave us confirmation, but I am passing on this trade, as I simply do not trust it at the moment as it has swung right the way to heavily overbought... With this being the case, I predict that now is not the right time to get into this with a straight call (it being on the RS) as we are likely to lose money before it appreciates. It did take a massive gap up yesterday (which could have banked us a probably couple of dollars) but was just not worth the gamble.
The system I am using is very mechanical, and because of that, if the charts don't fit, then we do not trade. As simple as that! If anything, we have saved a couple of hundred dollars on a learning experience!
The rest of the ETF's are not really tradable at the moment... there are a couple of triggers, but the trend is not very strong, so would rather avoid it. I am in no rush to give signals out when the trends are only adequate. I want really great triggers so that we consistently MAKE money. I see no real point in using a scatter gun approach to this.
So that is the update today, have a great Easter weekend, and once we get back to the trading floor, we shall see how the stocks perform. I would not be surprised to see a reduction in the possibilities of trading (i.e. less stocks reaching new highs) over the next few weeks, but we shall see how it goes.
I have been toying with the idea of only having a set number of stocks on my watch list, but that seems counter productive. The chart dictates when these will dip presenting us an opportunity to trade, and it would be sod's law that all the ones we discount will offer the best trades in a weeks time...
Ultimately the watch list will get longer. I am having a look to see what I can do to add a watch list on the side so that you can see it at a glance. That would be very beneficial for all (so you do not have to read through all my guff to get to the good stuff!)
Happy Easter, and hope you have a good one!
The watch list is growing quite dramatically, and I am wondering whether to put some more ETF's on there, to include the gold and oil indexes. The reason being is that unless you live in a cave, you will know that they are both trending upwards, and Gold is consistently touted as being as high as it has ever been.
The ETF's are great to trade options on, because the options are both affordable, and you have strike prices that are only $1 apart. This is very important for our second strategy (LS) as it brings the tied up margin down to only $100 per contract, and your profit return is much greater. I would rather get a $20 return from $100 margin than a $40 return from $250 margin... after all I could just buy 2 contracts at the $20 giving me a $40 return from $200 (25% return for 1 contract of $100 margin, rather than a 19% return from the 1 contract of $250 margin). Any way, I digress...
The blog posts will start to get shorter as I concentrate on the good stuff... the trades and the options to be bought.
The watch list has pretty much doubled today - which is great, as it gives us far more potential trades to go through with. If we get too many trades, it means we can just pick out the really good ones. I.e the ones that we think will give the biggest returns or the ones with the least risk.
So our updated list today:
MMSI
FMCN
LULU
BIDU
BJRI
MELI
IRM
SLGN
SINA
PCLN
FOSL
ULTA
MWIV
IPGP
WLK
PTEN
CPHD
CPX
CEVA
DECK
PII
IL
CROX
Out of these we have had another trigger in IRM. This stock is now way overbought. This is on the LS strategy, so once we get confirmation that this is a viable trade (which we will probably get by today's close I predict) then we will look to do a credit spread. So this will be fixed risk, and we will be getting credited straight away with the cash!
The ETF's are:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
The DIA finally gave us confirmation, but I am passing on this trade, as I simply do not trust it at the moment as it has swung right the way to heavily overbought... With this being the case, I predict that now is not the right time to get into this with a straight call (it being on the RS) as we are likely to lose money before it appreciates. It did take a massive gap up yesterday (which could have banked us a probably couple of dollars) but was just not worth the gamble.
The system I am using is very mechanical, and because of that, if the charts don't fit, then we do not trade. As simple as that! If anything, we have saved a couple of hundred dollars on a learning experience!
The rest of the ETF's are not really tradable at the moment... there are a couple of triggers, but the trend is not very strong, so would rather avoid it. I am in no rush to give signals out when the trends are only adequate. I want really great triggers so that we consistently MAKE money. I see no real point in using a scatter gun approach to this.
So that is the update today, have a great Easter weekend, and once we get back to the trading floor, we shall see how the stocks perform. I would not be surprised to see a reduction in the possibilities of trading (i.e. less stocks reaching new highs) over the next few weeks, but we shall see how it goes.
I have been toying with the idea of only having a set number of stocks on my watch list, but that seems counter productive. The chart dictates when these will dip presenting us an opportunity to trade, and it would be sod's law that all the ones we discount will offer the best trades in a weeks time...
Ultimately the watch list will get longer. I am having a look to see what I can do to add a watch list on the side so that you can see it at a glance. That would be very beneficial for all (so you do not have to read through all my guff to get to the good stuff!)
Happy Easter, and hope you have a good one!
Wednesday, April 20, 2011
Watchlist expanding
The daily watch list is growing, and along with the ETF's I have also got some great stocks to look at as well.
These are split into the Risky strategy (RS), and the Low risk Strategy (LS). When a trade becomes viable, I will give you more details as to what they are. Better to try to get the watch list functioning properly first. At the moment all of these are potentials on a watch list, and certainly not something you should look at investing yet.
They are broken out as follows:
RS:
LULU
BIDU
MELI
SINA
LS:
MMSI
FMCN
BJRI
IRM
SLGN
All these are trending upwards, and I am awaiting a trigger that signifies a pull back which will give us an opportunity to enter a trade on the bullish side. The RS strategy will take advantage of this with a straight Call (a bullish trade), and the the LS strategy will take advantage of this with a put credit spread. The credit spread is a slightly more complicated trade to put together, but when the opportunity arises I will guide you through exactly what options you may choose to pick. The concept - once you get your head around it is pretty easy. We buy puts as a credit because if the price of the stock at expiration is above both puts, we earn money. As I said, when we get to the trade, all will be explained.
On our ETF watch list we have some good potential trades coming up in the next few weeks. Our watch list looks like this at the moment:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
Of these, only the DIA is trending upwards, and we have had a trigger - although due to my rules, we only have one day left for the trade to go our way. This is still a potential bullish play, but I will be waiting this one out.
IWM, XLE, and SPY are all flat at the moment, so these are effectively off the radar for any sort of trades until we know which way they will take off. If it goes flat for the next week, I do have one more play that will benefit in a sideways market, but the sideways market needs to be well established too ensure that the trade does not go awry.
The Q's and SMH are both down trending and I am keeping my eyes open for a trigger to look for trades with them.
I would envisage that within the next couple of weeks we will have a trade opportunity, but the main thing is too not jump into a trade for the sheer impatience of it. That is a sure way to lose money on options.
A little bit more about my strategy would be useful so that people can have a little more confidence in the system that I have:
First and foremost it is about picking good strong stocks that are leading their way in their respective markets. I intend to choose stocks that are expensive - over $50 for the RS as these will give us the biggest returns (for every $1 the stock moves, the option price should increase by $1 for in the money options. Think about this for a second. If you bought 100 shares of company X for $50 and it moves up to $55 - you would be pretty pleased. A 10% increase in a stock is a great investment. However, to have those 100 shares you would need to have $5000 free - or if you were properly using money management - you would need an account size of roughly $166,666 to place a trade with only 3% of your account used. You can start to see that to make that cash, you are not using it very efficiently.
Think of an option where you pay $2 per option. Each option contract has control over 100 shares, so you pay $200 total for 100 shares.
If that same stock goes up $5, you could have an option contract that is now worth $7. A whopping 350% return.
If you had that same $5000 invested in that option contract, you could look at 350% return.
The lower the price of stocks means that this increase will not be as vast. After all, a $50 or a $100 stock has more chance of moving $1 than a $15 stock.
So why have I included stocks on here that are under $50?
For the very reason that they are going to have small changes in value. Calls and Puts are straight forward to buy. The stock goes up with a call, you earn money, if a stock goes down, you lose money (only up to your initial investment though - you can not lose anymore). So it stands to reason on the basis of the above explanation that the more money a stock costs, the bigger potential returns are for your option. The converse is also true with low valued stocks. Your straight calls and puts stand to gain the least amount of money... unless you move to a seller instead of a buyer. This is where a credit spread play comes into force.
A credit spread is basically this (for a bullish play)
You sell one put and you buy a put on the same stock but at different strike prices.
So you have stock X that is trading at $100
The strike prices you look at (for example) are at 99, and 98
Put 99 is being sold for $2
Put 98 is being sold for $1.5
In this example, you would sell the $2, but buy the $1.5 giving you a credit of $0.5 per option- so a profit of $50 per contract.
If everything goes against you, your maximum risk is the difference in strike prices ($1 x 100 in this case) minus your credit (as this is your cash). SO the most you could lose with the above example would be $50. You know before hand how mush you are set to lose, and how much you are set to gain. It is a very strange fact, that the more credit you gain, the less risk you have. If you took on a credit of $0.7, you could only lose $0.3 in total. How cool is that???!!!
The reason you have that liability is down to the strike prices. If you are called out on your sold put, you would automatically execute your call options - meaning that you would lose out $100 per contract. Because you have your credit already, you minus that from the $100
In the case above your ideal is that both puts finish out of the money - so the stock stays above the 99 put. You lose your $1.5 on your bought put, but gain $2 on your sold, so you have a net profit. This is why the put credit spread is a bullish play.
ON these credit spreads we will look to buy as little time as possible, but ensure we have enough premium to make it worth while. Because time does not decay in a straight line, we can buy about 30 days time, and from there, time decay eats into both options until they reach zero worth.
So the less value the underlying stock has - say $30, the less the movement of the stock will be, so the more chance we have that the strike price will be hit, the more chance the options end up with zero value which makes us winners!
I shall go over this with really examples on the trades we make, but it really is quite simple. They are also set and forget systems, with automatic rules. I will also use graphical representations to show profit and loss on these when it arises to give you a clearer view of what happens. Needless to say these have a maximum upside, but also a known risk - a trade off that is well worth it considering the stocks we pick will have a very high chance of going in the correct direction. We can also dictate what strike prices to pick, so if we want to be ultra conservative, we can pick a strike price further away. Again, a full analysis of the trade will give you more 'options' (no pun intended) for how you want to trade.
These are low risk strategies (hence LS!) so all the LS stocks as categorised above will fall into the credit spread trade to minimise our risk.
This is also the reason why a small account is better suited to the LS picks. Simply because as a maximum you need $100 in your account for 1 contract if the strikes are $1 apart (such as the ETF option chains), although most stocks are at the 2.5 strike price intervals (so $250 minimum in your account). The strike minus your credit is the absolute minimum (plus your trade charge).
Happy trading, and I hope you enjoyed today's blog - albeit very long!!!
These are split into the Risky strategy (RS), and the Low risk Strategy (LS). When a trade becomes viable, I will give you more details as to what they are. Better to try to get the watch list functioning properly first. At the moment all of these are potentials on a watch list, and certainly not something you should look at investing yet.
They are broken out as follows:
RS:
LULU
BIDU
MELI
SINA
LS:
MMSI
FMCN
BJRI
IRM
SLGN
All these are trending upwards, and I am awaiting a trigger that signifies a pull back which will give us an opportunity to enter a trade on the bullish side. The RS strategy will take advantage of this with a straight Call (a bullish trade), and the the LS strategy will take advantage of this with a put credit spread. The credit spread is a slightly more complicated trade to put together, but when the opportunity arises I will guide you through exactly what options you may choose to pick. The concept - once you get your head around it is pretty easy. We buy puts as a credit because if the price of the stock at expiration is above both puts, we earn money. As I said, when we get to the trade, all will be explained.
On our ETF watch list we have some good potential trades coming up in the next few weeks. Our watch list looks like this at the moment:
DIA
QQQQ
IWM
XLF
XLE
SPY
SMH
Of these, only the DIA is trending upwards, and we have had a trigger - although due to my rules, we only have one day left for the trade to go our way. This is still a potential bullish play, but I will be waiting this one out.
IWM, XLE, and SPY are all flat at the moment, so these are effectively off the radar for any sort of trades until we know which way they will take off. If it goes flat for the next week, I do have one more play that will benefit in a sideways market, but the sideways market needs to be well established too ensure that the trade does not go awry.
The Q's and SMH are both down trending and I am keeping my eyes open for a trigger to look for trades with them.
I would envisage that within the next couple of weeks we will have a trade opportunity, but the main thing is too not jump into a trade for the sheer impatience of it. That is a sure way to lose money on options.
A little bit more about my strategy would be useful so that people can have a little more confidence in the system that I have:
First and foremost it is about picking good strong stocks that are leading their way in their respective markets. I intend to choose stocks that are expensive - over $50 for the RS as these will give us the biggest returns (for every $1 the stock moves, the option price should increase by $1 for in the money options. Think about this for a second. If you bought 100 shares of company X for $50 and it moves up to $55 - you would be pretty pleased. A 10% increase in a stock is a great investment. However, to have those 100 shares you would need to have $5000 free - or if you were properly using money management - you would need an account size of roughly $166,666 to place a trade with only 3% of your account used. You can start to see that to make that cash, you are not using it very efficiently.
Think of an option where you pay $2 per option. Each option contract has control over 100 shares, so you pay $200 total for 100 shares.
If that same stock goes up $5, you could have an option contract that is now worth $7. A whopping 350% return.
If you had that same $5000 invested in that option contract, you could look at 350% return.
The lower the price of stocks means that this increase will not be as vast. After all, a $50 or a $100 stock has more chance of moving $1 than a $15 stock.
So why have I included stocks on here that are under $50?
For the very reason that they are going to have small changes in value. Calls and Puts are straight forward to buy. The stock goes up with a call, you earn money, if a stock goes down, you lose money (only up to your initial investment though - you can not lose anymore). So it stands to reason on the basis of the above explanation that the more money a stock costs, the bigger potential returns are for your option. The converse is also true with low valued stocks. Your straight calls and puts stand to gain the least amount of money... unless you move to a seller instead of a buyer. This is where a credit spread play comes into force.
A credit spread is basically this (for a bullish play)
You sell one put and you buy a put on the same stock but at different strike prices.
So you have stock X that is trading at $100
The strike prices you look at (for example) are at 99, and 98
Put 99 is being sold for $2
Put 98 is being sold for $1.5
In this example, you would sell the $2, but buy the $1.5 giving you a credit of $0.5 per option- so a profit of $50 per contract.
If everything goes against you, your maximum risk is the difference in strike prices ($1 x 100 in this case) minus your credit (as this is your cash). SO the most you could lose with the above example would be $50. You know before hand how mush you are set to lose, and how much you are set to gain. It is a very strange fact, that the more credit you gain, the less risk you have. If you took on a credit of $0.7, you could only lose $0.3 in total. How cool is that???!!!
The reason you have that liability is down to the strike prices. If you are called out on your sold put, you would automatically execute your call options - meaning that you would lose out $100 per contract. Because you have your credit already, you minus that from the $100
In the case above your ideal is that both puts finish out of the money - so the stock stays above the 99 put. You lose your $1.5 on your bought put, but gain $2 on your sold, so you have a net profit. This is why the put credit spread is a bullish play.
ON these credit spreads we will look to buy as little time as possible, but ensure we have enough premium to make it worth while. Because time does not decay in a straight line, we can buy about 30 days time, and from there, time decay eats into both options until they reach zero worth.
So the less value the underlying stock has - say $30, the less the movement of the stock will be, so the more chance we have that the strike price will be hit, the more chance the options end up with zero value which makes us winners!
I shall go over this with really examples on the trades we make, but it really is quite simple. They are also set and forget systems, with automatic rules. I will also use graphical representations to show profit and loss on these when it arises to give you a clearer view of what happens. Needless to say these have a maximum upside, but also a known risk - a trade off that is well worth it considering the stocks we pick will have a very high chance of going in the correct direction. We can also dictate what strike prices to pick, so if we want to be ultra conservative, we can pick a strike price further away. Again, a full analysis of the trade will give you more 'options' (no pun intended) for how you want to trade.
These are low risk strategies (hence LS!) so all the LS stocks as categorised above will fall into the credit spread trade to minimise our risk.
This is also the reason why a small account is better suited to the LS picks. Simply because as a maximum you need $100 in your account for 1 contract if the strikes are $1 apart (such as the ETF option chains), although most stocks are at the 2.5 strike price intervals (so $250 minimum in your account). The strike minus your credit is the absolute minimum (plus your trade charge).
Happy trading, and I hope you enjoyed today's blog - albeit very long!!!
Tuesday, April 19, 2011
The start of something special?
So, I have been away for some time now working on a couple of new strategies that I want to put out there among the people who follow my blog. Basically I plan to share with you what I am doing, and will cover everything from my watch list to my trades. I plan to actually create something that can earn everyone some cash.
I have now been in the option game for about 5 years, and in that time, I have made some good decisions, and certainly some bad ones. The great thing is that I have learnt from all these decisions, which is the best form of experience you can have! I now plan to start a fresh with 2 new strategies that everyone can benefit from. I do plan to start monetising these in the future, but I want to offer this free to the first 50 people. You will be my BETA testers, and will get everything I release for free. This includes a membership site that will be built in the next year (so you will always have access), my trading guide that I will be working on - to put it in perspective, the guide alone could be charged for up to $400. The membership site could be up to $40 per month!
SO for those that want to get in on the ground level, all I ask is that you follow me and email me to say you want in on bestoptiontrader at hotmail.co.uk. Please add your name in the email and I will make sure you get the updates when they come.
You will get EVERYTHING I release for free! I ask that you do just a couple of things. Be honest with me- what works, what does not. If you understand something, or you do not. I will originally send all things through my blog - so my updated watch list everyday, and my picks (the great thing is that these picks can be done at any time)
The way this will work is that I shall build up a fresh watch list. This will be updated on my blog daily for the coming months until everything is sorted with the website - so basically everyone can see what I am doing. The watch list will be built up from of the company fundamentals, and then a final sanity check by looking at technicals - I want 'predictable' stocks. i.e, stocks that have a strong trend.
I shall then be looking at a trigger that will signal a buy or a sell signal- This is not the last part though - I shall then be looking at confirmation that it is doing what I expect. This bit is the great bit about this method. The confirmation can have 5 days to happen. This means that if i have a confirmation on day 1, and you pick it up on day 4, the trade is still seen as active. If however, I get a confirmation on day 5, a trade will have to be placed on that day.
To manage everything effectively over the next few months I will be moving over to awebber - an automatic tool that will send emails to everyone (and mail merge it so it is personal to you!). 50 People will get this service for free. You can tell your friends and family about it (I am not expecting a huge rush, so give it some time). The reason it is free will be that a) I want people to be honest that things are working before I start charging people, and b) no one knows who I am from Adam. c) It will takes some time to build a watch list - I will be starting with only a limited amount of ETF's to begin with (actually there is a nice set up happening on one of them at the moment) and then it takes some time to get proper trade entries. SO basically, I can not charge people money for nothing. I plan to only be honest with this. I am not looking to up sell or any VIP members sites or any of that rubbish. I am not a marketeer, I am not looking to get rich from scamming people. I love doing this work and want it to be my full time occupation. To do this I need some motivation, and some consistency, and if I know I have customers who are depending on me to earn them some pocket money (an extra $50 -$10000 per month!) then I have my motivation.
With the honesty thing in mind, I shall be removing all the adverts off my site, and will only be adding things that I personally use, or have used that add value. If you like what I am doing, then I think that what I add will be good for you, and I would have already bought it and used it- There is so much rubbish that is touted out there that I think having someone who can actually vouch for a product is invaluable- however, at the same time, I am hoping not to have to put anything up there, because we are all making good money that there is no need for any extras- I want to be all you need, and my mission is to ensure that I can provide this. This is why I need your feedback.
So it's a new day, It's a new life... For me, and I am actually feeling pretty good.
The format will take some tweaking, but to start off with here is my watch list at this moment:
DIA - this is set up the best so far, and with any look a trade will be confirmed in the next couple of days.
IWM
QQQQ
XLF
XLE
SPY
SMH
These are all ETFs (Exchange traded funds) and despite only one of them being anywhere near tradable, they are great for my second strategy.
The strategies are as follows:
The 'risky strategy' (RS) will consist of straight call and put buying. This will also mean that you will require a bigger balance for a couple of different reasons. However, the fundamentals of the stock say that the price will either go up or down consistently, the technicals confirm this and trigger the trade only when everything is on our side. We look to go one better, by buying plenty of time- ideally 3 months, 2 months at the least, as we plan to sell the option with 30 days left. This way we get the maximum amount of profit without time decay eating into our profits.
The LRS' (LS) The LS is a much less risky strategy which will serve a lower account balance. The trades will be performed as a credit spread. We will be pretty confident that the stock will move in our desired direction, and we will look to take in a credit (buying and selling a call or put at a different strike price to earn our selves a tidy little credit). We will be looking to buy between 15 - 45 days worth of time, as time decay on this strategy actually works in our favour.
As we come to actually place the trades, I will explain the why's and the logistics.
I will be starting with a $5000 account balance, and looking to place 10% of my account on any one trade. This is scalable upwards. The trades I place will be a mixture of the RS and the LS strategies. If you have a large account balance, you may want to copy exactly, however with a smaller account balance, you can increase your risk to 25% of your account on any one trade (we will look at a 50% stop loss on an option price - so you would only risk 13.5% on your account excluding commissions). If you have a micro account - anything less than $500, you should be able to follow some of the LS strategies, however $500 is probably the least you want to start with as you may need to buy additional contracts, but that can be discussed later.
That is all for now. The main thing you need to look at is the watch list. Email me with 'I WANT IN' in the subject title, and I will add you to my distribution list and we will start on our money making journey together.
I will not guarantee that you will make money on every trade. Losing is part of trading, but we want to keep our losses to a minimum. I would suggest using a demo account to start with, or paper trade my trades so you can see that the trades I am making make money. Ultimately you need to decide whether you place a trade or not. The risk does lie with you, and you alone, however, it is in my interests to make sure that I give you the ability to make those decisions with the best foundation possible. My aim is to make myself money through my trading not through memberships and the like (that is why I am happy to give out freebies to start with). Anything given away freely will not have any value. I believe this does have value which is why I will charge for it. The 50 lifetime memberships are there for a demo group. They are actually servicing me and doing me a favour - one which will be paid back many times over in both value and cash!!!
I have now been in the option game for about 5 years, and in that time, I have made some good decisions, and certainly some bad ones. The great thing is that I have learnt from all these decisions, which is the best form of experience you can have! I now plan to start a fresh with 2 new strategies that everyone can benefit from. I do plan to start monetising these in the future, but I want to offer this free to the first 50 people. You will be my BETA testers, and will get everything I release for free. This includes a membership site that will be built in the next year (so you will always have access), my trading guide that I will be working on - to put it in perspective, the guide alone could be charged for up to $400. The membership site could be up to $40 per month!
SO for those that want to get in on the ground level, all I ask is that you follow me and email me to say you want in on bestoptiontrader at hotmail.co.uk. Please add your name in the email and I will make sure you get the updates when they come.
You will get EVERYTHING I release for free! I ask that you do just a couple of things. Be honest with me- what works, what does not. If you understand something, or you do not. I will originally send all things through my blog - so my updated watch list everyday, and my picks (the great thing is that these picks can be done at any time)
The way this will work is that I shall build up a fresh watch list. This will be updated on my blog daily for the coming months until everything is sorted with the website - so basically everyone can see what I am doing. The watch list will be built up from of the company fundamentals, and then a final sanity check by looking at technicals - I want 'predictable' stocks. i.e, stocks that have a strong trend.
I shall then be looking at a trigger that will signal a buy or a sell signal- This is not the last part though - I shall then be looking at confirmation that it is doing what I expect. This bit is the great bit about this method. The confirmation can have 5 days to happen. This means that if i have a confirmation on day 1, and you pick it up on day 4, the trade is still seen as active. If however, I get a confirmation on day 5, a trade will have to be placed on that day.
To manage everything effectively over the next few months I will be moving over to awebber - an automatic tool that will send emails to everyone (and mail merge it so it is personal to you!). 50 People will get this service for free. You can tell your friends and family about it (I am not expecting a huge rush, so give it some time). The reason it is free will be that a) I want people to be honest that things are working before I start charging people, and b) no one knows who I am from Adam. c) It will takes some time to build a watch list - I will be starting with only a limited amount of ETF's to begin with (actually there is a nice set up happening on one of them at the moment) and then it takes some time to get proper trade entries. SO basically, I can not charge people money for nothing. I plan to only be honest with this. I am not looking to up sell or any VIP members sites or any of that rubbish. I am not a marketeer, I am not looking to get rich from scamming people. I love doing this work and want it to be my full time occupation. To do this I need some motivation, and some consistency, and if I know I have customers who are depending on me to earn them some pocket money (an extra $50 -$10000 per month!) then I have my motivation.
With the honesty thing in mind, I shall be removing all the adverts off my site, and will only be adding things that I personally use, or have used that add value. If you like what I am doing, then I think that what I add will be good for you, and I would have already bought it and used it- There is so much rubbish that is touted out there that I think having someone who can actually vouch for a product is invaluable- however, at the same time, I am hoping not to have to put anything up there, because we are all making good money that there is no need for any extras- I want to be all you need, and my mission is to ensure that I can provide this. This is why I need your feedback.
So it's a new day, It's a new life... For me, and I am actually feeling pretty good.
The format will take some tweaking, but to start off with here is my watch list at this moment:
DIA - this is set up the best so far, and with any look a trade will be confirmed in the next couple of days.
IWM
QQQQ
XLF
XLE
SPY
SMH
These are all ETFs (Exchange traded funds) and despite only one of them being anywhere near tradable, they are great for my second strategy.
The strategies are as follows:
The 'risky strategy' (RS) will consist of straight call and put buying. This will also mean that you will require a bigger balance for a couple of different reasons. However, the fundamentals of the stock say that the price will either go up or down consistently, the technicals confirm this and trigger the trade only when everything is on our side. We look to go one better, by buying plenty of time- ideally 3 months, 2 months at the least, as we plan to sell the option with 30 days left. This way we get the maximum amount of profit without time decay eating into our profits.
The LRS' (LS) The LS is a much less risky strategy which will serve a lower account balance. The trades will be performed as a credit spread. We will be pretty confident that the stock will move in our desired direction, and we will look to take in a credit (buying and selling a call or put at a different strike price to earn our selves a tidy little credit). We will be looking to buy between 15 - 45 days worth of time, as time decay on this strategy actually works in our favour.
As we come to actually place the trades, I will explain the why's and the logistics.
I will be starting with a $5000 account balance, and looking to place 10% of my account on any one trade. This is scalable upwards. The trades I place will be a mixture of the RS and the LS strategies. If you have a large account balance, you may want to copy exactly, however with a smaller account balance, you can increase your risk to 25% of your account on any one trade (we will look at a 50% stop loss on an option price - so you would only risk 13.5% on your account excluding commissions). If you have a micro account - anything less than $500, you should be able to follow some of the LS strategies, however $500 is probably the least you want to start with as you may need to buy additional contracts, but that can be discussed later.
That is all for now. The main thing you need to look at is the watch list. Email me with 'I WANT IN' in the subject title, and I will add you to my distribution list and we will start on our money making journey together.
I will not guarantee that you will make money on every trade. Losing is part of trading, but we want to keep our losses to a minimum. I would suggest using a demo account to start with, or paper trade my trades so you can see that the trades I am making make money. Ultimately you need to decide whether you place a trade or not. The risk does lie with you, and you alone, however, it is in my interests to make sure that I give you the ability to make those decisions with the best foundation possible. My aim is to make myself money through my trading not through memberships and the like (that is why I am happy to give out freebies to start with). Anything given away freely will not have any value. I believe this does have value which is why I will charge for it. The 50 lifetime memberships are there for a demo group. They are actually servicing me and doing me a favour - one which will be paid back many times over in both value and cash!!!
Thursday, February 11, 2010
Online Trading Stock and Option: The Best Way to Leverage Your Capital
Online trading stock and option is happening in a big way. First with the introduction of the internet trading in stocks online became a rage with the people. After having understood that, now the next in course is option trading. Trading in option is different from stocks and it is a test both for new investors as well as experts. Option trading provide a big opportunity for making money but having said that you have to be very cautious while doing it as it can go as easily as it comes.
The risk involved in options trading is very high. You require large sums to deal in options and the also have to be quick in making your choices. It is more for the experienced people to trade in these as compared to the new investors. The risk involved in option trading is very high but on the other hand the return that one gets if the right choice is made is also as large. The large sum that can be made in option trading tends to tempt a lot of new investors but this is one area where one needs to be very cautious so it is best left to the seasoned players. The chance of losing is so high that even the experienced lot end up losing big money at times.
A lot has been said about the negative aspect of option trading now let us look at the positives of the same. The risk involved need not be as high, as the traders can cut down the risk by keeping a check on a section of stocks. The option has a time period after which they will expire. If the expiry date is at the end of the trading week then the trader will have to close the deal within the said period. The deadline is crucial in this case.
Option trading is quite risky as said before and you should have a substantial amount kept aside for this purpose if you want to deal in option trading. It is a game where you win all or lose all. If the choice made by you is right then you can either choose to buy it or else redeem the same for a confirmed price. But unfortunately if luck does not favor you and you end up with the wrong selection then all the money is lost.
Online trading stock and option is good provided you have that kind of a financial back up in case you end up losing a large sum of money. The people who end up making money in this are those who have taken calculated risks and have studied the stocks well. A thorough study of put and call options would have to be made before investing in option trading.
Option traders unlike stock traders can make money regardless of the movement of the stock prices. The research, study and news gathered remaining the same a stock trader can become an option trader and increase his returns by increasing the risk element simultaneously. But a little adventurous stock trader can possibly turn into a good option trader.
The risk involved in options trading is very high. You require large sums to deal in options and the also have to be quick in making your choices. It is more for the experienced people to trade in these as compared to the new investors. The risk involved in option trading is very high but on the other hand the return that one gets if the right choice is made is also as large. The large sum that can be made in option trading tends to tempt a lot of new investors but this is one area where one needs to be very cautious so it is best left to the seasoned players. The chance of losing is so high that even the experienced lot end up losing big money at times.
A lot has been said about the negative aspect of option trading now let us look at the positives of the same. The risk involved need not be as high, as the traders can cut down the risk by keeping a check on a section of stocks. The option has a time period after which they will expire. If the expiry date is at the end of the trading week then the trader will have to close the deal within the said period. The deadline is crucial in this case.
Option trading is quite risky as said before and you should have a substantial amount kept aside for this purpose if you want to deal in option trading. It is a game where you win all or lose all. If the choice made by you is right then you can either choose to buy it or else redeem the same for a confirmed price. But unfortunately if luck does not favor you and you end up with the wrong selection then all the money is lost.
Online trading stock and option is good provided you have that kind of a financial back up in case you end up losing a large sum of money. The people who end up making money in this are those who have taken calculated risks and have studied the stocks well. A thorough study of put and call options would have to be made before investing in option trading.
Option traders unlike stock traders can make money regardless of the movement of the stock prices. The research, study and news gathered remaining the same a stock trader can become an option trader and increase his returns by increasing the risk element simultaneously. But a little adventurous stock trader can possibly turn into a good option trader.
Monday, February 8, 2010
Online Trading Stock and Option: The Best Way to Leverage Your Capital
Online trading stock and option is happening in a big way. First with the introduction of the internet trading in stocks online became a rage with the people. After having understood that, now the next in course is option trading. Trading in option is different from stocks and it is a test both for new investors as well as experts. Option trading provide a big opportunity for making money but having said that you have to be very cautious while doing it as it can go as easily as it comes.
The risk involved in options trading is very high. You require large sums to deal in options and the also have to be quick in making your choices. It is more for the experienced people to trade in these as compared to the new investors. The risk involved in option trading is very high but on the other hand the return that one gets if the right choice is made is also as large. The large sum that can be made in option trading tends to tempt a lot of new investors but this is one area where one needs to be very cautious so it is best left to the seasoned players. The chance of losing is so high that even the experienced lot end up losing big money at times.
A lot has been said about the negative aspect of option trading now let us look at the positives of the same. The risk involved need not be as high, as the traders can cut down the risk by keeping a check on a section of stocks. The option has a time period after which they will expire. If the expiry date is at the end of the trading week then the trader will have to close the deal within the said period. The deadline is crucial in this case.
Option trading is quite risky as said before and you should have a substantial amount kept aside for this purpose if you want to deal in option trading. It is a game where you win all or lose all. If the choice made by you is right then you can either choose to buy it or else redeem the same for a confirmed price. But unfortunately if luck does not favor you and you end up with the wrong selection then all the money is lost.
Online trading stock and option is good provided you have that kind of a financial back up in case you end up losing a large sum of money. The people who end up making money in this are those who have taken calculated risks and have studied the stocks well. A thorough study of put and call options would have to be made before investing in option trading.
Option traders unlike stock traders can make money regardless of the movement of the stock prices. The research, study and news gathered remaining the same a stock trader can become an option trader and increase his returns by increasing the risk element simultaneously. But a little adventurous stock trader can possibly turn into a good option trader.
The risk involved in options trading is very high. You require large sums to deal in options and the also have to be quick in making your choices. It is more for the experienced people to trade in these as compared to the new investors. The risk involved in option trading is very high but on the other hand the return that one gets if the right choice is made is also as large. The large sum that can be made in option trading tends to tempt a lot of new investors but this is one area where one needs to be very cautious so it is best left to the seasoned players. The chance of losing is so high that even the experienced lot end up losing big money at times.
A lot has been said about the negative aspect of option trading now let us look at the positives of the same. The risk involved need not be as high, as the traders can cut down the risk by keeping a check on a section of stocks. The option has a time period after which they will expire. If the expiry date is at the end of the trading week then the trader will have to close the deal within the said period. The deadline is crucial in this case.
Option trading is quite risky as said before and you should have a substantial amount kept aside for this purpose if you want to deal in option trading. It is a game where you win all or lose all. If the choice made by you is right then you can either choose to buy it or else redeem the same for a confirmed price. But unfortunately if luck does not favor you and you end up with the wrong selection then all the money is lost.
Online trading stock and option is good provided you have that kind of a financial back up in case you end up losing a large sum of money. The people who end up making money in this are those who have taken calculated risks and have studied the stocks well. A thorough study of put and call options would have to be made before investing in option trading.
Option traders unlike stock traders can make money regardless of the movement of the stock prices. The research, study and news gathered remaining the same a stock trader can become an option trader and increase his returns by increasing the risk element simultaneously. But a little adventurous stock trader can possibly turn into a good option trader.
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