I like the charts for a short term long here. I am looking to build some long biased positions. I particularly like the Nasdaq via the MNX, and the S&P via the SPY. I will include a charts later.
I was listening to the President speaking about writing congress to open the intercontinental shelf and Alaska to drilling. I agree with this. I also believe we can create alternative energy sourcesin which the world can use. But here is the point, I am somewhat angered how he portrayed us.
He said, “We want to create better options for our CONSUMERS” What a bastard! I am a CITIZEN first. This may be a fundamental philosophical belief which makes him such a poor president.
He views me, and you, as a consumer rather than a citizen. He would probably treat us all differently if he viewed me as an important part of the American fabric. But rather he views us as economic drivers only. November can’t come soon enough. I am still scratching my head about my choices, but I will respond to the President who engages the American Citizen.
I have my MicroCalendar Scanner working again. Horray. No hits yet, but I have found a number of good candidates. I knew they were out there somewhere.
I have been fairly active during the morning session:
Trades:
MFE – Added Aug/Sept 35p to go along with July/Sept. I bought these @ .52, but after the market weakness today, I have backed off on purchasing more at that price. I bought 1 more unit on the close for .50.
MNX – 2 units of Aug/Sept 190p calendar for 2.02 to 2.00. I looked at this trade a number of ways. And with a Bullish engulfing pattern on the daily charts, and the pullback to 61.8%. It offered a perfect opportunity to put my first tranche of trades in. Breakevens are 180 and 202. Very nice
IWM – buying back Aug 71/69p for 1.19cr. I originally bought a 71/68 spread for about 1.10. I wanted to take this risk off the table.
MA – Made 10 Aug/Oct 250p flips for an average of .35 a turn. I would have done it all day if I could. I caught an order, then worked it as long as they would fill. There was more than $14 of extrinsic value in the Aug options. Lots of room for play
Afternoon update:
It was UGLY in the afternoon for the markets. The market has retested the lows. Yikes. Fortunately, I have not added that much. I put 2 units of the MNX. The spread has moved off about 5%, but still in theta positive territory. I was faked out on the remainder of my IWM spread. I exited the rest for 1.12.
My calendars in MFE, USB, and URBN are slightly positive. Fortunately, I had the MA trades which worked out. By the end of the day I could have sold the MA spreads for $6. Oh, well.
Also, POT has sold off again. This time it tested 210. My July 210/200/190p is looking good as we get ready for the weekend.
A fund I want to eventually get in, CGMFX, will take a beating today. They are heavily levered into PBR, Steel, and Ags. Ouch. Click on the link to see what happened to the top holdings. Ripped to heck.
Pattern DayTrader rules. I dislike the desire for Government to attempt to protect me. The government should solve other problems, like an energy plan. But instead, the desire to disable an acct under 25K when it comes to making intraday trades. I prefer to enter a position and have a relatively tight stop. This is a smart play. Perhaps I lose a couple of hundred dollars. However, with daytrading rules and an acct under 25k, this simple discipline is revoked. I am going to write a letter to congressman and express my displeasure with this rule.
Here is a quick Q & A on the rule:
If I have several accts I use. Let’s say, 4 accts (IRA, Roth IRA, Brokerage between 15,000 to 20,000 per acct. I don’t daytrade often, however sometimes I do. First of all, can my accts be considered to be combined in order to be over the 25,000 amount?
Unfortunately, the minimum is considered on a per account basis. So, if you want to day trade on any given account, that specific account must have $25k or higher.
Is the pattern daytrade rule considered 3 daytrades in a day, or a week?
You can do up to 3 day trades but it’s a 5 business day rolling period. Meaning, if you make 3 day trades on Monday, you may again do another 3 day trades starting Tuesday of the following week, i.e. after 5 business days have passed from the time you did a day trade…
Thirdly, when I do intraday trade. If I am trading a spread, and buying it for 2.00 and it hits my target at 3.00 during the day, or I get stopped out @ 1.25. I would exit. Would that be considered a day trade?
Certainly, any trade that opens a position, and then closes the position on the same day is considered a day trade, irrespective of whether it’s a LIMIT or STOP order.
Which products does this apply to? Is daytrading in stocks, single options, option spreads, and option adjustments part of the rule?
This applies to every product, except futures and forex.
And finally, if I entered a trade and already had 3 “day tradesâ€, would I be able to exit a 4th position? Or would I have to hold it overnight?
You must hold it overnight, otherwise, your account will be closed for the regulatory period of 90 days, or until you bring your account’s equity to the regulatory minimum of $25k.
These laws may have originally created by regulators who were well meaning. The agencies are FINRA, the SEC & NYSE. Remember these regulators believe that you should give you money to a mutual fund because they are professionals.
This is the law. It is frickin, unbelievable. UNBELIEVEABLE. For example, If today I decided it was time to enter POT long at 220. And then it breaks down (as it did today), below previous lows (212), and you had already been stopped out 3 times intraday while establishing new positions, you would be SCREWED! The stock closed at 211, and after hrs it is 209. By morning who knows where it will be. The agencies in their wisdom are trying to protect you from overtrading,and losing monies in brokerage fees. I pay $1 per contract to enter and exit a trade, yet I may lose several hundreds or thousands of dollars because I have to hold on to a trade running against me. It is simply absurd.
I plan on sending letters to the FINRA, the SEC & NYSE regulators. The law is now a joke, it is outdated, it doesn’t protect anyone.