After 6 months of paper trading and 2 months of real trading including one month with OPN subscribers (as speculative trade), I think I am beginning to understand Google’s (GOOG) behavior. This was my second consecutive profitable pinning action with Google. Well, this month it didn’t quite pinned at $430 but I was rewarded for a thoughtful plan. Just look at the intra-day chart of Google, compare with broader market and you will notice how Google behaved. I had shared my zoning thoughts with OPN subscribers last month (to view this you need to be a OPN subscriber). Last month it resulted in +58% gains in one day when we used a different strategy to play stock pin.
I opened a 430/420 Bull put spread for $4.40 credit, but I was little too early as Google dropped. I again open another round of $430/$420 Bull put spread but this time for $7.50 credit. Google behaved precisely what I had originally forecasted but then I started to book my profits. First half was covered for $2.75 and next for $2.15 per spread resulting in average 86.4% gains in one day. Well, in retrospect I would have been able to keep all the credit ($11.10 for $8.10 investment on average) as it would have expired worthless but I don’t like to give my profits back.
When Google started to advance towards $440, a strike that was also suggested as a pin point based on “Max Pain Theory” (I didn’t agree with it and hence opened 430/420 earlier) I opened $440/$430 bull put but then quickly bot it back for almost break-even even though it would have given great results had I booked profits earlier. But hey, no coulda woulda shoulda.
To add, GS was pinned near $180, OIH near $165, ISRG $300, MA $220, RIMM $105, Apple was not really pinned near to any strikes.
As I expected earlier, it was not an easy week. Happy Ester and a fulfilling, well-deserved long weekend.
Profitable Trading, OP
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