If tza would bump up 50 cents I would sell the sept call and forget about it.
How 'bout that stock market?
- Thread starter Ski_Banker
- Start date
If tza would bump up 50 cents I would sell the sept call and forget about it.
35 is resistance, 43 or higher I would worry
High today.... 35.00 this stuff is too easy :biggrin:
That was so yesterday.:biggrin: I am all done with AIG for now.
LOL, you sound like me. I had 0 trades today, big pop then sideways zzzzz
I invest in a bunch of different sectors. I'm looking at getting Clayton Williams Energy (CWEI). Technically it looks good and the A/D chart looks strong. Its currently at $19. I could see it going to $30 before hitting some resistance. (Disclaimer. This is not a recommendation to buy the stock. Any purchases of this company is at your own risk!)
brb investing in 10,000 shares
I see your using the classic "bet the farm" approach. I remember those days. :biggrin:
You can also consider this alternative approach.
Look at the price swings of the stock and buy X number of shares based on an average of the price swing (Average True Range). The more volatile the stock, the less shares you should own.
ATR is discussed at http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_true_range_a.
The problem is that the pros (aka Ryan :smile
know where most traders will put their stops (price to sell if the stock goes the opposite direction that you expected to go). They can short a million shares to make it go down triggering all the stops and then buy back 2 million shares to make it go way back up. As a result, you get booted out and he takes your shares. The idea is to keep your stops really far away.This approach makes all your stocks evenly weighted in your portfolio so no single stock will kill you if it goes down hard.
The formula is:
[Your Portfolio Amount*(Percent Risk)]/
(Yesterday's Closing Price - Stop Price)
Stop Price can be calculated as (Closing Price - 4*(N Day Average True Range (ATR))). The ATR can be computed using a spreadsheet and most trading programs can do this automatically. (I use a 10 day ATR).
For CWEI the 10 day ATR is 1.08 and last Closing Price was $19.27
Stop Price (price to get out regardless): ($19.27-4*1.08) = $14.95
Say you have $100k total portfolio amount and you want to risk no more than $1000 of loss for a single stock (risking no more than 1% of your portfolio).
For CWEI, it would be
($100,000*(0.01))/($19.27-$14.95) = 231 shares
or ($1000,000*0.01)/(4*(10 day ATR)) = 231 shares
That comes out to be (231*$19.27) = $4,451 for that trade. If the price goes down to $14.95, you will sell and lose at most roughly $1000, exclusing slippage and commissions (which could also be factored into the formula).
One other thing to mention is that if the ATR is very small, the share value can get very large to the point where you are essentially betting the farm. If the ATR was 0.25 instead of 1.08, the calculated shares would have been 4000 shares totaling $76,000.
To fix this problem, limit no more than 10% of your money on a single stock. By capping it at 10%, you limit your risk at $10,000/$19.27 = 518 shares.
So calculate the shares based on the ATR and the 10% rule and take the smaller.
Most programs and spreadsheets can do this automatically so you don't have to waste your time doing it by hand.
This is one approach to managing your risk. Now you just need to find a trading style and trading strategy that your comfortable with.
Good luck.
I see your using the classic "bet the farm" approach. I remember those days. :biggrin:
You can also consider this alternative approach.
Look at the price swings of the stock and buy X number of shares based on an average of the price swing (Average True Range). The more volatile the stock, the less shares you should own.
ATR is discussed at http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_true_range_a.
The problem is that the pros (aka Ryan :smile
This approach makes all your stocks evenly weighted in your portfolio so no single stock will kill you if it goes down hard.
The formula is:
[Your Portfolio Amount*(Percent Risk)]/
(Yesterday's Closing Price - Stop Price)
Stop Price can be calculated as (Closing Price - 4*(N Day Average True Range (ATR))). The ATR can be computed using a spreadsheet and most trading programs can do this automatically. (I use a 10 day ATR).
For CWEI the 10 day ATR is 1.08 and last Closing Price was $19.27
Stop Price (price to get out regardless): ($19.27-4*1.08) = $14.95
Say you have $100k total portfolio amount and you want to risk no more than $1000 of loss for a single stock (risking no more than 1% of your portfolio).
For CWEI, it would be
($100,000*(0.01))/($19.27-$14.95) = 231 shares
or ($1000,000*0.01)/(4*(10 day ATR)) = 231 shares
That comes out to be (231*$19.27) = $4,451 for that trade. If the price goes down to $14.95, you will sell and lose at most roughly $1000, exclusing slippage and commissions (which could also be factored into the formula).
One other thing to mention is that if the ATR is very small, the share value can get very large to the point where you are essentially betting the farm. If the ATR was 0.25 instead of 1.08, the calculated shares would have been 4000 shares totaling $76,000.
To fix this problem, limit no more than 10% of your money on a single stock. By capping it at 10%, you limit your risk at $10,000/$19.27 = 518 shares.
So calculate the shares based on the ATR and the 10% rule and take the smaller.
Most programs and spreadsheets can do this automatically so you don't have to waste your time doing it by hand.
This is one approach to managing your risk. Now you just need to find a trading style and trading strategy that your comfortable with.
Good luck.
thanks for the info - much appreciated!
After reviewing the information you provided on your application, we have approved and enabled your account for up to Option Trading Level 2 – Buying Calls and Puts.
So you can also sell covered calls? If so get in touch with Danny. He is a pro at this point. :smile: My work here is done. :biggrin:
Plus Danny is a really cool guy too.
Thanks much Danny (and Steve) for taking the time to school me on this subject. Powerful stuff, I get the math, the concept is easy and I wish I had known about it before.... I will be playing around with this .
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When you see the numbers in just plain simple terms in the spreadsheet, the bulb does most definitely go off :biggrin:
Follow AMR. I've beaten that one to death over the past year, it consistently pays a nice premium.....I think I'm going to have them put my name on the side of one of their planes :tongue:
Follow AMR. I've beaten that one to death over the past year, it consistently pays a nice premium.....I think I'm going to have them put my name on the side of one of their planes :tongue:
Thanks much Danny (and Steve) for taking the time to school me on this subject. Powerful stuff, I get the math, the concept is easy and I wish I had known about it before.... I will be playing around with this
Many pages back in this thread I complained of my platform locking up and not letting trades through that should have executed. I remember one trade in particular where I sold deep in the money options on AMR IIRC and amr fell to a penny. I was trying to buy the options back for a nickle and the platform wouldn't work. That trade was way over 50k in my favor. I am still pissed about it. There are many more as well. If we are lucky maybe there will be a huge lawsuit. I can spend hours filling out paperwork to have a bunch of money paid out by the big brokers only to have the money go into some bullshit fund and I will never receive a dime.
So let me get this straight. China is possibly recommending the default on derivatives and the market is up? WTF!!!
Insider selling is the highest it's been since 2006 and the market is up? WTF!!!
Unemployment is near 10% and the market is up? WTF!!!
Think about it for a second, does anyone here think that the pre 2009 consumer will be back in the market place any time soon?
Insider selling is the highest it's been since 2006 and the market is up? WTF!!!
Unemployment is near 10% and the market is up? WTF!!!
Think about it for a second, does anyone here think that the pre 2009 consumer will be back in the market place any time soon?
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funky world we live in man....
for the good news I got in OPXA around +140% today and held on till about 220% !!!
for the good news I got in OPXA around +140% today and held on till about 220% !!!
I should be putting more money to work because of interest rates but I can't help but believe these guys are all suckers. I was as long and strong as anyone else in the market, but with my personal funds and while trading professionally, but this is a joke. Globally there is going to be a lot of increasing revenues and profits but especially in the context of the U.S. the markets don't seem to be facing reality.
I'm still all long but more than 50% cash. What I do own is safer firms with high yields and exceptional balance sheets. If they come lower I'll buy more but I'm not risking it.
And that is the consensus of just about everyone I know. They aren't buying until theres a pull back so who the hell is buying? BTW I am short so I am bias.
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No, but......................no one win by being completely one sided, of course I can make a big ass case on the bear side as well, but I don't have time:
$4 trillion dollar of paper wealthy back to consumer's pocket since March. $4 trillion paper wealth in people's portfolio is got to make people feel a little bit better right?
USA is not the only consumer in the world. While US consumers are recovering, consumers of other nations are just emerging.
I was in Australia last month, global recession, say WHAT?? it must be a USA thang. J/K :tongue:
I try to absorb as much information from different perspective as possible, one of my favorite one sided bearish site is crashmarketstocks.com, I almost felt sorry for the man, as market kept on doing the opposite of his predictions what seems like every single day despite he has really great points:
http://www.crashmarketstocks.com/
USA is a big nation, in some areas the situation may seen quite depressing, but in other areas it may not seen as bad.
Q3 earning kick off in October 7th.
Holiday retail sale numbers will get a big boost from price drop of PS3 and Xbox 360 even though manufacture lose money on every system.
There are still companies with great balance sheet, fundamentally sound, with revenue boost catalyst that will reflect in Q3.
Trading the market has become a national sport, the greatest game
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My "opinion" and what I have observed locally (maybe its just OC, take my opinion for what it is, don't get overly critical and hold me responsible for what I said):
-I noticed there are definitely small businesses starting to pop up, a few month ago, that was completely unheard of. Now, it is fairly easy to spot random new busnesses that took over a retail spot that was vacant.
-I always hear people say business have pick up recently.
-I do my part to help economy. I like to shop as it is my joy, hobby, my research, and my earning depend on it. My experince during the past few month is that if you go to Louis Vuitton and Chanel shops in South Coast, expect waiting in line to pay
Last week I was at Tiffany until I saw the line, I could not help but say fcuk that shit and had to go back to pick up supplies during weekday. -The amount of new medium to high end cars on the road since March is just astonishing. E92 M3s, Ferraries, Porsches, IS-Fs. I mean it is just jaw dropping. There is no such thing as exotic car here unless it is Enzo level, because everything is common. I know people made a killing from the market since March, but come on, this is just freaking unreal. I guess it must be that dealers are giving them away?
The market already had such an incredible run, it can go up or down, but as far as consumer goes, world don't just end, people live on.
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Ski_Banker
Suspended
Steve, see my post of a few weeks ago. It explains the mentality. LT, you are definitely correct but it'll take time/events/data before the current long-we're-in-recovery buyers switch directions. It won't happen overnight, barring some really really unexpected geopolitical event.
I could see a pull back. Going into Oct? Sure......
But many xperts have already called a V bottom, and the Gov. claims the worst is behind us. Do I believe it? Not sure, only time will tell.
What does this chart tell you? Buy or Sell?
http://finance.yahoo.com/q/ta?s=^GSPC&t=5y&l=on&z=l&q=l&p=&a=&c=
But many xperts have already called a V bottom, and the Gov. claims the worst is behind us. Do I believe it? Not sure, only time will tell.
What does this chart tell you? Buy or Sell?
http://finance.yahoo.com/q/ta?s=^GSPC&t=5y&l=on&z=l&q=l&p=&a=&c=
I play both sides. Even with this overall uptrend, there are plenty of stocks that have peaked already and are trending down. Certain sectors are showing signs of a downward trend.
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