posted
I think you went way too far down....that would be a really risky put. You might make really going money on it, but if it doesn't get below 38, you get nothing.
I think the QQQQs will be down below 40 by June, so I have (in real trading) purchased a few June 44 Puts, 43 Puts, and 42 Puts. The 44 will make the most money if it gets lower....but I also paid the most for it.
Chart's advice was to look for the extremes, then on the 5 minute chart, peg the top (or bottom) and buy - you can save yourself a lot of money that way.
-------------------- Study before you buy, Sell before you think about it.... Posts: 3903 | From: Gulf Coast | Registered: Jun 2006
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posted
Even if you're buying 38 strike puts, it doesn't have to get below 38 to make money. As long as the stock moves down towards your strike price before too much time runs out, you will still make money. Basically, people will be buying the option on speculation that it will reach that, or they'll be buying to close that option that they sold.
If you went out real far (both time and strike price wise) and picked a contract selling at $.05 per share, its very possible for you to double that money quickly...if the market moves in your direction, fast enough and far enough. It doesn't ever have to get to your strike price, as long as you have time value. If you only have a month or so left and you're still way out of the money, then you'll be likely to expire worthless.
Posts: 1028 | From: Georgia | Registered: Jul 2005
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posted
Ok guys thanks so much for explaining it....
so basically, it is the safest to buy near the current price & place a call or pull, then to go farther out-of-the-money, but the farther you go the more you can make but more than likely it will wind up expiring worthless....
Correct?
-------------------- ..just remember....Family is EVERYTHING!! Posts: 3944 | From: Rochester, NY | Registered: Sep 2006
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Is this: short put instead of buy calls, and short calls instead of buying puts ?
Also in,
"Since I had a PUT - I was going to short a Call ...". Jenna seems to be saying she's playing a combination. In this case a reverse synthetic stock consists of the combination she mentioned? I thought we were talking about straight calls and puts. I can use some help here.
Posts: 130 | Registered: Jul 2005
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posted
JLo- Don't mind what I said.....I already had in my regular orders when I went back & re- read the thread & saw Chart's "trick" then I was going to try that while I had my others orders already in and compare but my account is just virtual....
Also, those "trick" orders, most never went through because I would have needed 100,000 in my account.....
-------------------- ..just remember....Family is EVERYTHING!! Posts: 3944 | From: Rochester, NY | Registered: Sep 2006
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posted
When done right, is it selling calls/puts, or combination of long + short as in synthetic stock ?
Posts: 130 | Registered: Jul 2005
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Here's a weekly chart, we're going down SherriT! lol ~
Notice too that on a Weekly chart only once a year does the Stochastic fall below the 20 line of it's indicator... We are falling right for it!
See the support/Res line at about $43? Draw it from today back to the start of 2006 where it started, now our next "goal" is the $40 mark. That amount was set back at the end of 2004, beginning of 2005, see it?!
Now look along that line all the way to the present, the cubes bounced off that line both ways, up and down, so this is a strong area of support/Res and our next target!!!
posted
I'm learning...didn't buy my options early enough, but you can bet I will be there for the next round of calls in the summer! I should still make some nice money on them.
-------------------- Study before you buy, Sell before you think about it.... Posts: 3903 | From: Gulf Coast | Registered: Jun 2006
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posted
March Expiration day! Hung on at the end to wins on GM,YHOO,UAUA..etc. Had to aggressively buy back CFC calls because it was running away. Market looks to CFC to survive and do well with less competitions among home lenders. I read it wrong, thinking it will at least stay flat among the carnage left by subprimes, corrected my mistake with small slippage and moved on. Didnt get my last day wins because of bad CPI report this morning and negative sentiments overwhelmed.
Posts: 130 | Registered: Jul 2005
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posted
I agree Sherri...I'm right at my stop loss, but haven't broken it yet. The chart looks like we could go either way. Looks like a little support here, but will it hold?
Posts: 1028 | From: Georgia | Registered: Jul 2005
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posted
I believe it will go down, or I never would have purchased in the first place, though, I wish I had sold when it went up, bought back low, etc, even with the higher commissions.
Won't make that same mistake again...even if I don't get another entry.
This thing has historically started going down every year around April/May (noticeably anyway)....at least the last two years.
In short, I think we are good Milliam!
-------------------- Study before you buy, Sell before you think about it.... Posts: 3903 | From: Gulf Coast | Registered: Jun 2006
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Accumulation isn't anything to write home about... CMoney Flow is Negative, and not racing to the positive side... Stochastic is oversold and cycling which is giving us a head fake IMO. Volume is the fuel for the fire, and clearly it has been drying up over the last couple days so I don't think much will become of this.
This is where "The Battle" is "resist. 43.52"
Surely it will try to break above it, then if it does it will retest this level, "if" that happens and it holds then it has a chance to run some more yet.
But with the low volume and negative CMoney Flow I think the Puts are just fine IMO
posted
Thanks Chart...that makes me feel a little better.
So what would you see on the charts that would signal that the puts aren't just fine? Just wondering what I should be looking for.
Posts: 1028 | From: Georgia | Registered: Jul 2005
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quote:Originally posted by milliam: Thanks Chart...that makes me feel a little better.
So what would you see on the charts that would signal that the puts aren't just fine? Just wondering what I should be looking for.
Excellent question ~
Accumulation indicator pointing straight up and the CMoney Flow doing the same on rising volume...
That would NOT be good...
But it looks to me like Stochastic has today and maybe tomorrow to run it's course before it's in the overbought range of the indicator and will then cycle downward.
Depending on CMoney Flow and Accumulation will depend on whether price climbs or stays about the same as Stochastic runs through it's cycles...
You can always look at BACKTESTS with indicators to milliam, note what they do before the price rises or falls, that's the best way to get a "read" on a stock.
--Example: Jan 10th CMoney Flow went positive and accum grew along with volume, -the price reacted to that and went higher...
I'm just not seeing "strentgh" in this chart for the current run, the history of the chart and indicators tells us what it needs to react a certain way, either up or down, so I have to call this a headfake...
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