8/22/2007- Opening gap

We still may have a quiet day, probably some light chop with a slight upward bias. There is no real catalyst for movement today. We will see.


Tuesday was a snoozer. I traded out of 1 position for a little profit, but other than that…ZZZzzzzzzzzzzzzzzzzz. Wednesday started with an opening gap to the upside. The gap took it to the down trend line. I may wade in with some put spreads on the indicies. We will see.
The Movie: Federal Reserve part 5 of 5 Read the book Spychips. Protection from “Database You” corruption is necessary.

ACF- I exited the remainder of the 15p calendar for .25. You gotta love it when your hedge provides a 200% return.
TIF – I exited the 40p calendar for .20. A nice 2 day double.
RHT – 20p calendar sold for .20. A double on 1 unit. Very nice. I wasn’t able to pick up up more so I just cleared my position for a nice little profit.
CYGX- Sold 1000 shares for .31. This was a fun little trade. I bought @ .24 and sold them into the retracement back to the down trend line. It all adds up.
IWM – a Discretionary short entry based on the downtrend line, 200day MA, previous high, and between 50% and 61.8% retracement lines. Sept 83-75p for 3.05 @ 79.60, and 3.00 @ 79.69. It is theta positive, with 50 delta and 2.5 gamma.
PDCO -earnings play. 2 units of the Sept/Oct 40p for .12. At the current price there is a 2:1 R/R ratio, However, at the expiration strike price there is a 7:1 reward to risk. I would like to pick up some 35p calendars to protect to the downside.

2 thoughts on “8/22/2007- Opening gap”

  1. Good Morning,
    We enjoy your daily comments and trade follow ups.
    If its at all possible,can you explain briefly how you do a calendar spread for a credit.
    Thank you
    Joe Gerber

  2. Joe,
    Thank you for checking in on the blog.
    To answer your question, look for an overlapping bid/ask spread between the two contracts. When you see it, you can then put the order in for a credit. Optionsxpress doesn’t allow for the trader to put in Calendars for credits, however ThinkorSwim does. TOS is simply the best options broker out there.
    The credits don’t get filled very often. Don’t expect to get too many of them.
    all the best,
    Jon

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