OptionPundit

Category: Intraday Trading

  • Pre-Market Losers

    A fantastic day (of course assuming that one embraces volatilities well) for some bearish play.

    Bearish plays on a bearish day can yield significant returns but one needs to be very careful and should clearly defined entry and exit points well in advance. Before I share the list, pls note that we may play some speculative trades for OPNewsletter subscribers as bonus alert, so pls stay in touch with the forum.

    TTWO, AAPL, RIMM, FSLR, GOOG, AIG, BAC, JPM, GS, CS, EWZ, POT, CF, MOS, MON

    One you have determined your entry exit points, choose whichever bearish strategy you would like to play (Put diagonal, bear call, bear put, straight put and many more).

    Trade carefully, trade profitably, OP

  • POT (+54%), CF (+28%)

    Before market opened I talked about Fantastic Four (POT, MOS, MON and CF) and to keep an eye for bearish strategy. Here are the intraday trading results of the two bearish play I used for my intraday trading set-ups (POT and CF). Though these fell even further, but double digit gains for less than 1 day holding aren’t bad by any measure.

    Few month’s back I had written about where we were headed and what were the key points. Those I still consider to be valid and something that my readers should be watchful. These are tough times and hence careful trading and due dilligence is of utmost importance.

    Profitable Trading, OP

  • Equity Option Expiration and Pin Opportunities

    Today is a special day, a day that occurs only once a month offering good opportunities for intra day trading. Today is Aug’08 option expiration Friday.

    Before I proceed to talk about opportunities, pls note that the threshold for automatic exercise of stock-settled in-the-money options is $.01. Long equity options in the money by $.01 or more will be automatically exercised. Please monitor all your expiring positions and check with your broker for if you do not want to be assigned. Also be especially careful with the estimated $.17 DIA dividend on Friday morning.

    If you are looking for some past discussion, check out OP Forum (free section). If you are an OPNewsletter subscriber, pls check this link to see an example of GOOG pinning in action.

    Top of the list includes Google(GOOG), ISRG. OIH, MA. Other key tickers to look at are Goldman Sachs (GS), Apple (AAPL), CME Group (CME), Amazon (AMZN) and Research in Motion (RIMM). But be careful, as options will lose time value and IV very rapidly. So if there are chances to make disproportionate money, so are the chances of loss.

    Pls do your own due diligence and stress test your strategies, create “what if” scenarios and understand the risk/reward so are prepared in advance.

    Profitable trading, OP

  • Pre-Market and Apple Update

    Even though the markets have been rallying recently I am not yet convinced. But I don’t fight with the markets and cautiously follow the turning points. Oil is down, Gold is down, financials are up and so is the transport. REITs are also starting to show signs of strength. Whatever you make out of it, be a little more cautious on every rally.

    Here are some names for pre-market activity-

    Gapping Up: NIHD, ISRG PHLY, CNH, WYE, GD, ILMN, WHR, WLP, and MCD

    Gapping Down: COST, CHRW, ZMH, VMW, BJ, ABFS, ADCT

    Apple had quite an amazing show. Before markets opened, here is what I mentioned to OPN subscribers for a bullish speculative scenario-

    AAPL- A Bullish trade. This is not for everyone. This is purely speculative and you my lose all your investments and hence capital allocation is extremely important. Nothing more than 2-3%.

    AAPL is down nearly $16 in the pre-market activity. Overall market futures are down as well, so expect it to be a bearish day…(except something interesting surfaces). I have generally observed that AAPL is good in guiding very conservatively and beat those nicely when the actual reports are shared. There is nothing majorly wrong in the results they have reported except the outlook and some concerns on margins. Which is what taking the stock down with it.

    I however think, $148-$150 area will prove to be a support area and within a few days it should recover some grounds and don’t be surprised if it fills the gap. (It may not results this way and that’s why I call it speculative).

    so a call diagonal, or a bull put spread or a bull call debit spread or bullish calendar maybe something good to look so that the risk is contained. BUT don’t do anything especially in the initial 30mins as you wouldn’t know if you are paying the right price (unless you are very very clear on the price you are paying is correct one). IV will also be tricky, it will be down but I don’t know when and how, specially for initial 30mins. Logic wouldn’t apply.

    So here we go, look for a bullish opportunity once AAPL finds a bottom today. And if you do make profits, book it, don’t leave for next day …profit taking never hurts.

    And rest is history now. After hitting a low of $146.5, it closed at $162. If you are an OPNewsletter subscriber, check out the “Directional (Non-OPN)” thread for my current holding on Apple. This was not part of OPN but a bonus one as part of speculative alerts. I shall update it when I close it today. We shall reapply similar strategy for some underlying in the up-coming days.

    Profitable trading, OP

  • Pre-Market Active

    There is lot going on the in the pre-market. Here are some noteworthy names for some intra-day trading.

    Gapping Up: WGOV, STLD, BJS, BHI, CAT, QLGC; BP, TOT. Gapping Down: TXN, AXP, V, MICC, AAPL, MRK, SNDK, AIB, VOD, EXP, PWRD

    My personal bias is to play bearish ones as it appears this is going to be a bearish day, at least based on futures action in the pre-market.

    Profitable trading, OP

  • VISA (+45%), BUCY (+13%) and More

    A recap of the last week’s trade ideas. Firstly, update on VISA (V) earnings-

    • A follow-up on free trade I mentioned here to play VISA earnings, the trade is up +11.6%. If Visa stays up to $88 by May’08 expiration, the returns will be the same. However, if VISA is pinned @ $85 on May expiration, the returns will be maximum i.e. 50% ($260 gains on $515 investment). In any case, don’t let the profits evaporate, so if it continues to move higher, I shall book profits and move on.
    • For OPN, we opened 70/67.5 Bull Put credit spread that wasclosed for +21%, within only 1 day holding period.

    visa-intraday-may-2-2008.png VISA and Master card I have been playing almost everyday since they announced earnings. But I didn’t mention here except once. After initial knee-jerk reaction yesterday I played a VISA intra day trade and collected +45.4%. There are a few more trades, but those are different speculative strategies for May expiration.

    Last week I also shared few intra day trading opportunities. I selected SPW and CMI and apprised OPN members of my selection out of the list that was on this main website. Speculative strategies are not part of OPN. Some members took advantage of speculative mentions and benefited from it.

    bucy-vertical-may-2-2008.png Interestingly, I also shared two stock split plays (BUCY and IVGN) and chose BUCY Bull Put Credit spread (as IVGNs bid/ask spread was too wide) for May cycle itself. Though together with some OPN members, I was able to close it for +13%, some members had to close it for a loss as soon after opening the trade, BUCY dived below $120. I think, it was the right thing to do, close and book loss when one is not sure what’s next. As IVGN fell on Friday, I opened bullish trades on it as well.

    Iron man has been released, we are in the game and let’s see what does marvel (MVL) management has to offer before market opens on Monday.

    Profitable trading, OP