option addicts

Bear Call on GRPN (Real Trade)

calendarguy — Wed, 30 Nov 2011 15:22:01 +0000

Reasoning:
1) Fundamentally the stock seems over valued.

2) Technical analysis might not be useful as the stock was a recent IPO.

3) Option pricing is indicating that you can be paid to short the shares and hold them.

Last time I saw this type of option pricing the stock proceeded to decline. See my post on Inverted Collar – GRMN. If you can find shares to short you can repeat what I did in the inverted collar trade for low/no risk profits.

Entry Point:

BTO Dec Long Call Strike 19

STO Dec Short Call Strike 15

NET Credit of $1.01

Risk of $2.99

Exit Points:
Primary Exit (PE): Let options expire worthless.
Secondary Exit (SE):
Roll position out in time as long as the option pricing exists.

Trade was filled on 11/28

Call Calendar – AAPL (Virtual Trade)

calendarguy — Tue, 22 Nov 2011 16:44:21 +0000

Reasoning:
1) Technical indicators are showing sell signals and chart is showing a stagnant trend in the short term. Long term trend is bullish.

2) Fundamentals still strong. I don’t see much further downside. Stochastic is over sold and we are near support.

3) Given the short term sell off in the market this may be a buying opportunity long term. AAPL is approaching value territory in the mid 300′s.

Expectation is for a bullish to stagnant trend.

Entry Point:

BTO Feb Long Call Strike 410

STO Dec Short Call Strike 410

NET DEBIT of $12.00

Exit Points:
Primary Exit (PE): Reduce cost basis to zero. Short term- Let short call expire worthless
Secondary Exit (SE):
Bullish: Roll short call.
Bearish: Exit if stock trends below support around 355.

Trade filled on 11/22.

Long Call – CMG (Virtual Trade)

calendarguy — Tue, 22 Nov 2011 16:34:01 +0000

Reasoning:
1) CMG has had strong fundamentals.

2) Stochastic is oversold. Stock is in a long term bullish trend.

3) Support seems to be at current level based on longer term trend line on the daily and a bounce at this level in Oct.

Expectation is a resumption of the trend.

Entry Point:

BTO Mar Long Call Strike 355

NET DEBIT of $10.3

Exit Points:
Primary Exit (PE): 100% gain. Will increase secondary exit to lock in profits or reduce risk for every 20% gain.
Secondary Exit (SE):

Bearish: Exit if stock trends to 290.

Trade filled on 11/22.

Bear Call on GRPN (Real Trade)

calendarguy — Tue, 22 Nov 2011 16:27:59 +0000

Reasoning:
1) Fundamentally the stock seems over valued.

2) Technical analysis might not be useful as the stock was a recent IPO.

3) Option pricing is indicating that you can be paid to short the shares and hold them.

Entry Point:

BTO Dec Long Call Strike 28

STO Dec Short Call Strike 24

NET Credit of $1.1

Risk of $2.9

Exit Points:
Primary Exit (PE): Let options expire worthless.
Secondary Exit (SE):
Roll position out in time as long as the option pricing exists.

Trade was filled on 11/15

Bear Call on VMW (Virtual Trade)

calendarguy — Thu, 13 Oct 2011 02:40:17 +0000

Reasoning:
1) Fundamentally the stock seems over valued.

2) Recent technical indicators show resistance at about 95.

3) Stock is declining from a recent high.

Expectation for a continuation of the bearish trend until support is reached. I do not expect the stock to trend above 100 in the next month.

Entry Point:

BTO Oct Long Call Strike 105

STO Oct Short Call Strike 100

NET Credit of $0.95

Risk of $4.05

Exit Points:
Primary Exit (PE): Let options expire worthless.
Secondary Exit (SE):
Bullish: Close at a loss if stock trends above 97.

Late entry: Trade filled at 0.95 on Sept 19th 2011.

Put Calendar – ICE (Virtual Trade)

calendarguy — Thu, 13 Oct 2011 02:27:37 +0000

Reasoning:
1) Stock is nearing resistance at the same time as the overall market.

2) Stock is in a stagnant long term trend.

Expectation is a resumption of the trend.

Entry Point:

BTO Dec Long Put Strike 115

STO Oct Short Put Strike 115

NET DEBIT of $4.20

Exit Points:
Primary Exit (PE): 100% gain. Looking for stock to trend to support in the 112-115 range.
Secondary Exit (SE):

Bullish: Exit if stock breaks out to the upside. Stop will be around 130.

Trade was filled at 4.2 on Oct 12.

Short put calendar on GOOG (earnings play)

calendarguy — Wed, 12 Oct 2011 01:38:56 +0000

I am just experimenting with a new trade that I want to try out and see how it behaves around an earnings event.

Trade:
BTO 1 Oct 540 Put
STO 1 Nov 540 Put
Net credit of $7.50.

Let’s see how it goes.

Put Calendar – NFLX (Virtual Trade)

calendarguy — Sat, 03 Sep 2011 21:58:25 +0000

Reasoning:
1) NFLX is trading at a fairly high multiple compared to the market. This may indicate some overvaluation.

2) Stock seems to be forming a new bearish trend and the stock is currently near the top of the channel.

3) Bottom of channel appears to be at about a 190 price level.

Expectation is a resumption of the trend.

Entry Point:

BTO Jan Long Put Strike 190

STO Sept Short Put Strike 190

NET DEBIT of $13.20

Exit Points:
Primary Exit (PE): 100% gain. Looking for stock to trend to 190.
Secondary Exit (SE):

Bullish: Exit if stock breaks downward trend.

Trade was filled at 13.17 on Sept 1.

Bull Put on AAPL (Virtual Trade)

calendarguy — Sat, 27 Aug 2011 18:30:45 +0000

Reasoning:
1) Fundamentally the stock seems under valued.

2) Recent technical indicators show support at the 50 day MA and the 355 level. .

3) Stock is rallying from the 355 level and the 50 day MA. The stock is in a long term bullish trend.

Expectation for a continuation of the long term trend. The market is bearish so that is why I am doing a credit spread instead of a directional trade. I do not expect the stock to trend below 355.

Entry Point:

BTO Sept Long Put Strike 345

STO Sept Short Put Strike 350

NET Credit of $1

Risk of $4

Exit Points:
Primary Exit (PE): Let options expire worthless. May also close short leg if 90% of premium is captured.
Secondary Exit (SE):
Bearish: Close at a loss if stock trends below support of 355.

Long Call – BIDU (Virtual Trade)

calendarguy — Thu, 11 Aug 2011 01:23:24 +0000

Reasoning:
1) BIDU has had strong fundamentals.

2) Stock seems to be ending a pull back in its long term bullish trend. Daily stochastic has crossed over.

3) Support seems to be at 20 week MA and 50 day MA.

Expectation is a resumption of the trend when the market reverses. I am expecting a sharp reversal after this fast down move in the major indexes.

Entry Point:

BTO Jan Long Call Strike 175

NET DEBIT of $9.00

Exit Points:
Primary Exit (PE): 100% gain. Will increase secondary exit to lock in profits or reduce risk for every 20% gain.
Secondary Exit (SE):

Bearish: Exit if stock trends below 130.