7/3 – Getting ready for the 4th.

The market gapped at the opening, and then continued up for a bit. Some of the leaders have faded in the mid morning. And as expected the volume is extremely low.


The market gapped at the opening, and then continued up for a bit. Some of the leaders have faded in the mid morning. And as expected the volume is extremely low.
I puts on IWM Aug 84/81p for .88, as the underlying was 84.4. It had peaked above it’s downtrend line, I made my move and put a unit on. This upmove has been on very light volume
BIDU – I was squeezed out of my Sept/Aug 160c calendar for a 40% loss. bummer. Volatility was crazy this morning. I was squeezed much too early. I probably could have scratched the trade with more patience. The underlying was up 6 today during the blow off top. And then gave it all back and then some. I still have a Aug/Sept 170p calendar for 1.80.
CREE – The spreads have moved out again (good thing). I am looking to start peeling off positions soon.
BUD- The spread is moving around a bit. I am considering putting on another 55p calendar postion if I can get the right price. The long term uptrend on the BUD chart looks very good for this trade. My only concern is the breakdown below the 50 MA today. However, looking at the chart it is not at all uncommon for this to happen. Breakevens for this trade @ .12 for the spread are 49.66 and 62.43. The Reward to Risk @ $55/sh is 15:1. Very Tempting.
BUD%20Chart.gif
FITB – I was assigned on 5 contracts today. USB and this FITB trade were both busts. Not much damage. I bought 8 contracts for .10. Very manageable. It was a speculative play. But I still don’t like losing.
IACI – underlying down. This aided my 32.5/30p spread. I don’t like spreads with strikes this close together. I probably wouldn’t put this trade on again in the future, but it does create my criteria to make money.
PALM – I exited the remainder of my twin calendars today July/aug 15p for .20 and July aug 17.5 for .10. This exit allowed me to do a bit better than breakeven on the remainder of the trade. I sold a unit off for .30 a few weeks back. So all and all, a 35% profit on the trade.
ABI – I entered 1 unit for .20. It looks like there was a Sept order for 88. My Aug/Sept 30p Calendar was taken on that order. I have 4 more units backing this up at a variety of prices. The Aug Vol is 7.2% higher than Sept. Breakevens are 27.88 and 32.79 while the 3 month trading range is 27.84 to 31.50. Those two events seem to point to a interesting dynamic. I am happy with the entry, yet I don’t want to load up on such a slow day in the mkt, unless I can get a great price. Also, running a Vol Crush test Aug dropping 9%, and Sept dropping 3%. The breakevens come in to 28.22 and 32.32. However, the spread widens by .15 at current underlying price levels.
ABI%20Chart.gif
I need to find a technical directional trade with a fundamental catalyst. I am also looking at ABI and EDS for skew calendars.
My current read is The Disciplined Trader by Mark Douglass. It is excellent. I wish I would have read it 5 years ago. It would have saved me lots and lots of money, and probably made me some too.
Have a happy 4th!

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