Holy Canoli! It was a big bull day. SP up 29! Down up 255! Geez.
All that positive, but CRZO gets hammered with Nat gas supplies way up. I did make some nice entries today though. I am positive deltas and theta at this time. I am in a good spot for a slow upward run. With the market in raging mode, I felt it was a good idea to look for some breakouts to the upside. I entered two which were hitting new highs on large volume.
HPQ – entered 46.36, .10 above the upper limit of the consolidation on 95% higher volume. I just bought long stock on this, with a defined stop @ 45.86. Fortunately the stock rocketed up to 47.35. Now with money in the trade I will look to turn this into a dynamic Hedging trade. I will be looking for this to continue a strong move for another day or two. I will look to buy the Aug 47.5p or 50p to protect the downside. I have been wanting to find a good tech name. I have 1 unit on this trade.
I made a mistake on SPF awhile back. I am thinking about modifying my entries in Dynamic Hedging trades. My idea is this: Buy the stock and create a loss exit if I am wrong. If I am, no biggie. Let’s use 100 shares of HPQ. Buy @ 46.36, stop (below previous range) 45.86. Loss $50 plus commission if wrong. However, if right Buy @ 46.36, let it run above next strike (or until you get to your delta number), and then “buy” insurance– buy a put below then price to effectively lock in profit. Or if it is a call option, look to straddle the the position with a put. HMM, I think I am on to something here! I did this with JADE about two months ago.
THINKorSWIM – l love this broker. Check out Shadow Trader too. The Think Desktop rocks! I had scoped the HPQ and the AMT trades a few days back. I set the alarm from the platform. When they went off, within 2 minutes, I was able to check volatility, review options, check the charts, and place the trade. Give these guys a look. If you like them, ask for the RandomWalkTrading rate if you like a good per contract rate, or the Optionetics rate if you trade larger quanities of options (slightly cheaper in bulk).
AMT – it too broke above a consolidation on 20% higher volume. I chose a Jan08 45-50p for 1.88 for this trade. I may have when too far out, but that is what the chart told me.
CRZO – It started off up .70 off the open, then the nat gas inventories came out 30% higher than estimated, and CRZO was crushed. it dropped below the previous low, I waited for life, and then exited this position for a 30% loss. It was only on 1 unit, so it was pretty easy to take. I hate being wrong, but it is just part of this game. And if this thing can’t get going on the strength of this move today, I am tossing it overboard!
SPY – I bought a second unit of the July 147/151/155 butterfly, but then the bulls had there way with me. I profit on this trade if it stays between 148.40 and 153.60. Oops. SPY closed @ 154.39. I felt pretty good with the prospects of SPY having 25pts of latitude. Haha. Bulls on Parade. The previous SPY high is 154.48. Above that, I have no hesitation about remaining bullish. I have HPQ and AMT as bullish plays.
CREE – The calendar spread is cracking open wide. I sold a 25p for .20 and still have a boatload to go. 30c is marking at .30, although none that I had for .22 have yet sold.
BUD – 55p Aug/Sept has widened. I am looking to exit this, as the underlying is not reacting well even in the face of this bull run.
IACI is looking good. It moved up and against me slightly.
NTES – I am not sure what to make out of this. Down slightly today. If I get the opportunity in the next few days, I will probably exit this. But with a slightly positive delta bias, I still like this as part of the portfolio.
This reminds me of the past month in the market. “Karate Kid” Ralph is the Bull, Steve Vai is the Bear. The moves have been rowdy, dramatic and dare I say fun!
I was going over the P/L since the ski season ended. I was impressed. One acct was up 55% (after comm), and the other (more speculative) is up 22%. It is a good start. I just need to continue to stay disciplined! Staying “tight”‘ as the poker players say, and not think I am playing with the “house’s” money. I had similar results last summer, overall up 72% (after comm). Although, over the winter I turned bearish in the face of a bull mkt and gave back much of those $$. The reason being??? I was following other’s advice/tips/strategies and pooped much of it away. It was MY fault, not the “well-meaning” advice givers. Although I did learn some beneficial things i.e Short Iron Condor strategies (for sideways mkt, but not raging bull!)