RCI - Lessons in Top Ticking

07NOV07 - I bought (1) JAN $50 call for $5.50 on RCI based on Option Addict heads up. This has worked sometimes and sometimes not. I think when it doesn't is because I hurry to enter and languish to leave. I applied a swing trading technique incorrectly. It appears I bought on the confirmation of the close above the recent high and I got in the next morning when I saw the price was up again. This entered me right at the tippy top tick but I didn't know that yet but should have seen the warning signs that day because it closed forming a dark cloud cover. Plus I was buying near the top acceleration band and it broke below the upper boundary of the Williams %R that day too. The next day was a high wave day which is another sign of possible bearish activity and indecision.

09NOV07 - I switched it into a short call calendar by selling the DEC $50s for $1.10 with no margin required. In hindsight, I could have sold the $45 call for $5.10 and covered my ass better but would have taken up some margin which I may have not had at the time.

14NOV07 - The price has clearly broken diagonal support and is tanking. I bought back the short $50 for $0.05 and rolled to the $45 calls on 19NOV07 for a $2.40 credit. It worked out pretty quickly but was still causing a loss to the original long call.

19NOV07 - A little rally, probably short covering, popped my out of my short $45 call for a $75 profit and I held my long only to see it gap way lower the next day on huge volume. Ugh.

13DEC07 - I continued to hold and hope with my option way out of the money and decaying. I told myself to finally sell at $0.20 and ended up selling it for $0.10.

Lessons Learned/Rules Broken:
1. Watch for better entries near support or resistance. Don't buy when the price is so over extended.
2. Plan your exit. Instead of setting a stop at the break of a pivot low or a trendline, I sold calls and locked in losses but not selling the right strike. I believed I was right and that it would come back. It didn't.
3. Look at the past but trade the hard right edge.

NIHD - Short DEC Calls Play

19Nov07 - I sold (1) DEC call vertical for a $0.92 credit using $408 in buying power on a high probability position.  I bought it back for $0.80 for a $6 profit incl. commissions.  It has obviously dropped and would have worked out but I closed it because I think I wanted to free up the buying power for something else.  I an not sure though... Learned I should record my trades in this blog earlier to keep the thoughts fresh.

EGN - Long Calls Entry & Trade Plan

26NOV07 - I am a consistently profitable, disciplined trader. I am working toward executing what I have been taught. Here is one good example. EGN, a natural gas company with strong fundamentals right near diagonal support. Recent hammer at the trendline on Friday and today. I got in this morning (after the first 30 min.) at the break of the short tern downtrend line. I set a trigger $62.13 at then bought a $60 JAN call for $4.50 ($0.10 below natural). I then turned right around and entered my contingent stop to sell $0.05 above the mark when it hits $60.44. The R:R is at the first target is 1 & 2.8 at second target of $67.23. Here we go...

27NOV07 - Price hit $60.42 and triggered the sale for a $100 loss.  Stop was a tad too tight.  Recent low from two days before was $60.46 so I should have set it 3% below that at least putting it at $58.65 which is a bit far for the R:R I was working with.

28NOV07 - Got back in at 7:37 am due to strength and early confirmation of the short downtrend break.  Paid $4.30 for (1) contract.

04DEC07 - Sold today when my second target trigger was hit and booked a $410 profit for a net gain incl. commissions of $404.  I could have squeaked out a bit more by setting a trailing stop or moving my stop up tighter but with the current market conditions I thought it best to take the profits safe and sound.  This is was a good disciplined trade.  Learned not to be so to the penny with the swing stops.  Next, learn to set LOC orders based on price triggers.

PCZ Trade - DEC $60 Call Based on Breakout

Tipped off from Option Addict and liked scalloped cup & handle and strong trend and higher oil prices. Got in based on higher open after break out of $58 and bought the ATM call. Instead of exiting with a small loss after the break of the intraday double top or on the lower close. Instead I sold the NOV $60 calls and then the $55s. This has consistently

OXY - $75 DEC Call Trade

18NOV07 - Picked up on OXY from the Option Addict watchlist and it triggered a breakout the day before while the overall market (SPX) looked like it was bouncing. Got in on 07NOV07 @ 6:35 am with a OTM DEC $75 call and it fell from there. I sold the NOV $75 call for $0.40 and bought it back for $0.05 two days later as the stock tanked along with the market. My cost basis is now $2.75 and I could sell the DEC $70 calls to break even if it stays bearish. But the market and the stock is oversold and has begun to bounce off support at $66 with resistance near by at $70 with the price at $68 right now. There is a descending triangle on the 10 day hourly so look for the break of $70 to confirm the short downtrend is broken.

21NOV07 - after the recent rally back up to resistance, I sold the DEC $70 call this morning as a theta hedge during the next 4 days. Shortly after selling it, the price rallied hard to the upper resistance at $74 exact. I felt that I had messed up and capped/extended my loss but saw the overall market was still weak. It closed lower on the day and is showing a shooting star at resistance. Look to sell the short $70 call at support or at a close above $74 resistance.

NOVember RUT Iron Condor

I have gotten to like trading the RUT ICs but I have been getting greedy only to see gains turn to losses.
Had a nice gain for a while and then gave it all back really quickly. I am back to a nice gain after rolling down.
Strong rally today gave back the spread on the call side. Looking to lock in profits if we break above resistance.

Check back at expiration to see if the orginal position would have held up okay.

18NOV07 - Ended up with a nice profit and closed out half the IC at the Thursday close. I should be closing out the whole trade on Thursday and roll to the next month to take advantage of the extra 3 days of time decay for the next front month. Setting up for selling the DEC Ruttie, but I am going to leg in this time.

CROX Iron Condor - CRIKEY!

After a great weekend of advanced technical trading, I enter the week with a new found exuberance for the Markets. I am considering a long term calendar on Mr. Softy now that it broke it basing pattern on Friday. Also looking at making another IC trade on the RUT.

29OCT07 - I did take a peak at the run to resistance of CROX. An oldie but goody, I am looking for a little more snappin' action. The Nov's have 95% imp.vol. right now due to upcoming earnings and the Fed announcement on Wend. I am short the $80 calls as the ceiling and the $65 puts as the floor. I must remember to keep enough capital on hand to close these shorts if the cage breaks and this thing comes after me like a Wild Kingdom outtake.

I run some risk, on paper a 1:1 within my acceptable loss amount if it totally falls apart. The bigger risk is if this thing takes off and I don't cover the short call so watch for that closely. Better yet, place a buy stop around $80 and look for increased momentum on the breakout.

13NOV07 - How quickly things can change. HELD OVER EARNINGS!!! AGAIN!!! Wasn't watching the downside very much. Sucka gapped $22 BUCKS! Bought back the call side for $0.05 and the seperately sold the calls for a total loss of $380.
DON'T HOLD OVER EARNINGS!!!

HANS - Also a bit of a scare

Legged into HANS this morning.



Sold the short first on the down swing.
Next time, buy the long first then when it starts losing value on the upswing, sell the short leg to lock in the juicy spread.

Exit stage right: Will kick myself for not buying a straight call - BTC short @ a nickle
Exit stage center: Watch the spot mark and smile for the people.
Exit stage left: Will stay for act II at a touch at $57
Fall off the stage: Earnings on Nov. 5th - Energy drinks starting to get a bad rap and flooded market. RTR = 1:3 with +60% probability

13NOV07 - UGLY! Similar to the recent LVS trade, I didn't sell at the trendline break on 11/7 but bought back the short $160 in the morning (first 10 min.) and then the long for an even greater loss later on the pull back up. Could have held the long put and made out nicely but would have held over earnings. Took a LARGER LOSS THAN I SHOULD HAVE by selling the positions seperately. Max loss was $170 but I took a $180 loss.

LVS - Bit of a scare

Got into LVS yesterday. Short Put 130/125 Nov for $2.00 credit

I hit the entry pretty good, right at the bottom channel support @ 7:55am
Sold on the high imp. vol., solid uptrend and support bounce at $122 confirmed that morning's open, and Sto. crossover below the 30 line. Watching the slightly lower recent high @ $140 closely.

Goes with: will set OCO to exit at $0.05 short - cha-ching.
Goes flat: see above.
Goes against: Have soft alert set at $127 at Fibo line. Buy back short and them close long put soon after.
Really Goes against: Placed hard stop at $121

13NOV07 - The entry was sweet, break of pull back with confirmation. The price created a nice uptrend line to $147.50. Broke the upward trend and I thought, naw, I won't sell yet. I have plently of premimum left and lots of room to move before things go bad. WRONG! I should have cashed out right at the break. Gapped down the next day and thankfully I sold. The next day it sold off heavy the next and confirmed a triple top and dropped hard over earnings. Thankfully I got out with only a $10 dollar loss + $6 commisions. I held past the trendline break.. BAD. Sold before my trigger... BAD. Cut my losses short... GOOD.

22 OCT 07 - Blog Launch & Entry Into Mastercard

After the move down on Friday and some profitable spread expirations, I was looking for either some more downside or a swing up. It made both. I saw the support at $150 and the morning bounce and feel like I missed the $8.10 sell of the NOV $150s, it went up and then back down, so I set my sell price at $8.20 and got filled and then it went down all day and bounced a bit at the end. Didn't loose much due to the delta on the long JAN $140 put.

Scenarios -
Up: expires worthless, sell another or look for another pull back
Sideways: time expires, take profits early
Down: wait 8 days from now and re-evaluate
Way down: Set sell limit past next support level around $140 and check for over sold conditions

13NOV07- I closed the $150 puts I sold on October 31st at $0.35 for a $785 profit. Only problem was I HELD THROUGH EARNINGS and the sucka gapped $20 bucks! and then kept going! This is the problem with holding long term calendar spreads in generally uptrending stocks. They can blow right through your profit range. Same thing happened with MMM. Now I am holding tight and looking at a bit of a rounding top consolidation. It may fill the gap or blast higher. Wait and see. Right now posting a total loss of $560 and the margin range sucks to sell anything worth the risk. Looking back, I should have taken the $400 2 day profit and split.