Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Swing trading virtual portfolio – week of August 2nd, 2010

This post is for live trades and daily comments. PLease click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here

 

Optrader 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Morning Opt….NFLX puts not behaving.  RU Out?  


  2.  NFLX-Iflanthe man, we only have 1/3 left. Let’s see what happens today, and if it closes significantly above the 5MA, then we will sell the last 1/3.


  3.  

    Arena Pharma downgraded to Neutral from Overweight at JP Morgan
    JP Morgan downgraded Arena due to valuation


  4.  see if we can get MON out of this range here, been basing nicely for a long while now. Would love to see a new closing high just above 60


  5.  ARNA-That should provide an opportunity to add for anyone who wants to. Valuation of what? A little bit crazy to downgrade or upgrade a stock on valuation when they have a major drug pre-FDA. Everything will change depending on the decision.


  6.  

    Netflix sell-off a buying opportunity, says Piper Jaffray
    Piper views the sell-off in Netflix shares since the company reported results on July 21 as a buying opportunity. The firm maintains an Overweight rating on the stock with a $140 price target.


  7. anyone following me on my recent gold and silver long?  gold doing well this morning, silver doing great.  Just watching today, we may need to exit, but I want to see more of the intraday action today.  I am still not sure if we saw the final low last week or if this is just a bounce before we put in one more leg down.  Hopefully we will get some clues by the end of the day today


  8.  I did follow you a little bit on silver, thanks ;-) Sold 1/2.


  9.  Some crazy bounce on ARNA


  10.  It feels like there is a very strong buzz building over ARNA and obesity drugs in the mainstream now.


  11. Thanks for posting, Albo. Good article that summarizes both companies. I do believe though that the potential for ARNA is higher than this, probably more than $2B in fact.


  12.  By the way even if sales are around $1B, then ARNA will make somewhere between $2 and $2.50 (based on the $330M share of the sales). Put a 15 multiple and you have at least a $30 stock. And JPM is talking about a $6 valuation….


  13.  Here goes MON breaking out of the flag :-)


  14. FCX – Strong, like a lot of stocks today.  Sold 1/3.   ( I did buy a few on Friday).


  15.  


  16.  /OS sold 1/3 AAPL calls


  17.  Glad we kept those AAPL calls. Doing their job today of balancing, bouncing nicely with market. Will probably buy the 1/3 back before close.


  18.  NFLX not that strong…


  19.  NFLX, you said it not me


  20.  not green either


  21.  Opt, how are you sitting in MON?  I may sell some and look to roll up on a dip, or would you wait till later in the day?


  22. all out of gold and silver


  23.  MON-I have 2/3. I rolled last week, I am in the 57.50′s. Not touching it.


  24. anyone following gold and silver should close out, as i already did.  It looks to me that we will be getting another leg down.  If not, we will get an easy entry back in at this level in the near future.  Safest thing is to be in cash on the trade.  I will look for a good shorting opportunity if it comes up…maybe tomorrow or today


  25. been buying some of the SEP 60′s today, you think those are ok, they seem nice


  26. I am out, thanks, Blake.


  27.  Are you shorting any more OREX here?


  28.  Not yet.


  29.  Opt – any PUTs you like at this level? I have small AMZN and NFLX left, but not too much delta. Had FCX as call, and just sold 1/3. Also, sold 1/3 AAPL. I have MON and GS as my only other calls. DELL, NFLX, AMZN as puts.


  30. Hannah, NFLX and AMZN are not looking very strong, maybe you can just increase delta on those. I am looking at other puts, will let you know.


  31. DELL not acting well, might have to close today.


  32. Does GLUU announces earnings tomorrow?


  33. SHLD has been in a nice uptrend, but hard to follow


  34. Shorting ERTS and NVDA. 


  35.  ERTS has earnings tomorrow after the close


  36. i got back in gold at 1183, but couldn’t post cause i was in a meeting trading on my phone.  I will probably close out by the end of day anyways though.  I really think we will get another good shorting opportunity this week, if not, then we are already on our ways to a new high, but i still think there is more downside


  37. GLUU-looks like it, yes


  38. RIG turning into a big winner. Earnings are on the 4th. Opt / English, should I hold through earnings? I don’t believe the earnings are going to be a factor this quarter.


  39. Opt, you gonna add to NFLX here or just keep 1/3? It continues to weaken…


  40.  I would not, or play a spread. You still have a couple of days till you have to decide depending on BMO or AMC on the earnings, but at least through tomorrow. It is right at the 50 here, have you taken any off the table thus far?


  41. Blake, thanks for the call on Gold earlier last week. Closed it out, no reason to go overly aggressive for me on this trade. Let me know when the setup presents itself again.


  42. English, I’ve taken some profit, yes, on RIG.


  43. NFLX-let’s wait for the close. But probably will add 1/3, and add 1/3 FDX for balance


  44. good trade arindamc.  We should get another good set up this week, just don’t know yet if it will be going long again or shorting it.


  45.  AKAM keeps getting crushed, I had a feeling that one was doomed.  Earnings season is very lame indeed


  46. V seems very despondent in the midst of the rally. Wonder why?


  47.  Opt – Are you adding ARNA here?  


  48. arindamc - AT&T (T), Verizon (VZ) and T-Mobile USA (DTEGY.PK) are reportedly working on a venture to get consumers to use smartphones as a mobile payment system instead of relying on debit and credit cards. Discover Financial (DFS) and Barclays (BCS) may help roll out a test system. Potential losers: Visa (V), MasterCard (MA).


  49.  STEC very boring


  50.  the nasdaq is the laggard thus far, not confirming a new high as of late. I think if we get another push higher this week, we need to see the nasdaq take the reigns and lead it otherwise the move overall may not sustain


  51.  i bought some V calls for a little fun as it sits on some serious support down here, maybe market can lift it a little.  


  52. ARNA-I have not been adding yet, but I covered some of the August 8′s that I sold on Friday. Not rush to add here, better to wait for momentum to come back.


  53. OREX – out.  Not comfortable being on opposite side of Opt.
    FCX – Covered last 2/3s with Aug 65s.


  54.  GOLD looks like a good short, the stock itself.  Blake, what do you make of the correlation here?


  55.  CSCO could be good if it can get over 24


  56. Well done, Albo, on OREX! you might even have been able to get more…I still only have 1/2 of my original small short.


  57. english-  yes, it does seem like the miners are setting up for good shorts.  I am going to wait till tomorrow, but I do think the whole precious metal sector has mroe downside very soon.  The target for GOLD that corresponds to my target for GDX would be about 83 on GOLD for the bottom of the move.  I don’t know what to tell you about starting a short position today or not.  I am going to wait till tomorrow, I beleive we will see gold move back above 1190 again before it starts declining.  Then I will probably short some gold and silver futures.  Curerntly long gold to squeeze out a few more bucks


  58.  Nielson says android sales top iphone in first half 2010 – DJ news wire


  59.  The rally seems  forced, on below average volume. Institutions must not be participating. 


  60.  AMR loving the higher oil prices


  61. Thanks, Opt.
    ARNA – Staying with short position on AUG 8s, for now.



  62.  Not real is a better phrase


  63.  AMZN looking better, see how it handles the 50 here, hopefully a denial but that is a text book looking bull flag it is breaking out of.


  64.  are arna earnings tomorrow?


  65. english- GOLD does look weaker than the other miners as well, you may be right on the money with that one.  If you want to short an individual stock


  66. Covered 1/2 of ARNA short.


  67. Amzn is looking stronger


  68. Opt – FXI.  Thoughts on buying initial position here?


  69.  nflx is looking good, glad i stuck with it. I was tempted to bail on friday with all the upgrades. What a scam


  70. Added a little bit of NFLX. Will mark it 2/3 by close


  71.  bought back my short AMZN weekly 115′s and sold the 120′s


  72.  Nice bounce in ARNA off that 5dma


  73.  How is the wine bar going?


  74. Wine bar-good! Taking longer than anticipated to get license because city department is backed-up, but everrything is going smoothly.


  75. Only other trade before close is to add 1/3 FDX for balance


  76.  I could not find my web link for it, what was it called?


  77.  no more AAPL against the rest of AMZN?


  78.  i guess that gets us balanced here


  79. Opt – Thoughts on FXI ?


  80. Yes buying back 1/3 AAPL


  81. FXI-I honestly have no opinion right here on it, Could go either way.


  82. Optrader - Is that the AAPL Aug260 calls?


  83.  What an anemic rally.


  84.  yes, the 260′s, Diamond.


  85. closed out my last gold trade from yesterday at 1190.  May still have more upside, but we are at some dangerous crossroads.  I am going to be watching for a good trade, short or long.


  86.  

    Vivus downgraded to Sell from Hold at Brean Murray
    Brean Murray downgraded Vivus and said a post marketing outcomes study is too risky of an experiment in obesity given the high appeal for individuals to take higher-than-tested doses. Price target cut to $2


  87.  

    Apple not looking to jump into cloud music in near-term, Cnet says
    Apple (AAPL) is telling record company executives that it is likely to offer only modest cloud music features within the next few months, according to Cnet, which adds that Apple may not introduce any cloud music functionality in the near-term. Some music insiders had expected Apple to utilize the technology of Lala.com, which it acquired last December, for iTunes. Lala.com enables users to play songs from Web-connected devices


  88.  STEC earnings after the close today, so let’s look for opportunity to work out when we can


  89.  Yes, agreed. Also, I will cover all my DNDN today.


  90.  Shorted a little bit more OREX pre-market. 


  91. Finished covering ARNA AUG 8s short.


  92.  Also shorted a little bit VVUS.


  93.  Covered more ARNA August 8′s..I have 1/4 left, might just let it run.


  94.  a little AMZN resistance at 122.50 on the trend line, but not much till 125 and then the 200


  95.  /OS sold 1/3 AMZN puts.


  96. Hi folks I am ending my subscription today, just wanted to say thanks for the education.  Following along for a couple of months gave me more confidence that I can develop my own trend following system and that it doesn’t have to be very complicated.  I prefer to make my own picks and use a more intermediate time frame, so I’ve been backtesting that on Wealth-lab along with TOS ThinkBack.  The light bulb went on when I realized I only had to be right on the entry about 50% of the time along with some scaling rules to ride the trend when it occurs to eventually win at this game.  I think when the price reverts to mean it’s pretty random which direction it will move off the mean, but it’s pretty certain that prices do move away from the mean and back again.
    It might be helpful if you updated the strategy page with the delta approach you are using, since it seems like a lot of the trades are chosen to balance delta. 
    Someone asked about RIG yesterday…I have lost money trying to play the short term trend. So I have short term put insurance against earnings cuz I have no idea how that will go, and then I sold 2012 leap puts at 37.5 to buy leap calls at a couple of different strikes.  I’m willing to let it sit for a year while rig demand sorts itself out and not worry if the price drops to 35.  Anyway, that’s how I’m playing it, we’ll see. 
    Blake, you were right about gold breaking the trend line, but I’m on different time frame, so for me it was buy on dips time.
    Anyways, thanks again for the education, it was fun.  -Gary


  97.  Gary-Good luck with your trading! Was great having you here, and glad you feel like you learned some good concepts.

    You are right, you only need to be "right" on entry only 50% of the time to make money. Even less in fact…


  98.  Opt, I sold out of my amzn. I did’t like the way the graph was looking moving above the 5ma, I also entered the position at a lower price than the portfolio. I am looking to add a short Should I be looking to add to my Nflx around 100.  Or should I look elsewhere Apol?


  99.  What a weird market. No direction whatsoever.


  100.  dent, yes I like NFLX. APOL looks good as well, breaking support.


  101.  Opt- ARNA is giving earnings after the close.  Do you think there is any significance or just more of the same?


  102.  No significance at all. Only thing that might matter is what they say "around" it about deals, etc..


  103.  AMZN touched that upper trend line, see if it holds. Getting tighter in this triangle with support around 115 still.  Target is wide, about $22 on a break out either way.  The funny thing is, $22 plus 122 is 144 which is  a perfect spot for a right shoulder


  104.  Going to step out on a limb and say we take out yesterdays low in the SPX today in a dramatic display of carnage and volume based on an unseen event or news item.  Maybe Geithner gets outed as a russian spy or something like that, possibly a solar flare or even an eruption at Yosemite.   LOL


  105.  sold a little ARNA I bought this morning, that this is crazy making .60c on a $7 stock


  106. Good move, English.  Quite a turnaround today.


  107.  Yes, like a 12% bounce from the low.


  108.  I sold some 8′s again.


  109.  sold some 8′s as well. Would love this thing to trade $6 tomorrow


  110. I just shorted silver at 18.560.  stop at the high of the day.  riskier trade, so smaller position


  111. closed out silver, took my loss


  112.  I wish NFLX and AAPL would decouple 


  113. Healthcare, specifically,  AET, UNH, And WLP very strong.


  114. CHK & XOM also looking strong.


  115. Blake I don’t understand, you didn’t get stopped out of silver did you?


  116.  looks like AAPL and NFLX decoupled


  117.  that smells of the corporate buyback program


  118.  STEC looking weak here


  119. was something said at the RIM event that moved NFLX?


  120.  who knows, NFLX trade with AMZN and AAPL trades with GOOG, which makes sense in a weird way because APPL and GOOG are real companies and NFLX and AMZN are ponzi schemes


  121. Funny


  122. This market is all over the place. Frustrating. Trying hard to be patient.


  123. Seriously, what happened to NFLX?


  124.  I really do think they bought back some stock, that is there business model


  125. Dent, yes the best thing is just to be patient. There is no rush. That’s why I have not been opening any new trades, and probably won’t today either. Will probably do it tomorrow as we should have direction from today’s movement.


  126.  their business model


  127.  that was big reversal on NFLX, I see no news. Sure makes the chart start to look different


  128. IF SPX breaks the 100 (exactly where it stopped yesterday), then we might have a trend here and should start leaning toward a little bit more bullish portfolio


  129.  seems more like the end of a rally, when you see the leaders lose interest and they start reaching for junk.  The SPX has been in an uptrend fro 110 points


  130. Opt- I am having trouble figuring why this is so?
    I am following David on XEC. The $65 august calls are priced at $6.5 while the $70 calls are priced at $2.80. It makes more sense math wise to buy the $65′s because of low premium. Why is there so much premium in the $70′s?

    Thank you.


  131. Opt- XEC trading at $70.50.


  132.  don’t like this


  133.  weird, the page got totally formatted differently there for a minute, now back to normal


  134. Bollinger bands are getting real tight again for a big move
     
    http://3.bp.blogspot.com/_mNgsiAj3Xko/TFhOrgXu6LI/AAAAAAAADFY/4M2dYe9dUN4/s1600/bb-3.png


  135.  triangle wedging on teh 60 min. SPX chart 10 points wide, looking for a 10 point move here soon in which ever direction it breaks. So maybe 1107 to fill the lower gap or 1131 to test the old high.  50/50 I know but looking for a breakout here as all things are lining up


  136. jdavis-  no, I didn’t get stopped out, but I closed the trade.  I feared it would jump hard and I didn’t feel comfortable


  137. I am long gold and silver again.  from 1187.5 and 18.450.  expecting 0.50-1 up in silver, 20-35 up in gold.  stop is a close below 1180.


  138. JPM’s Michael Feroli notes, the real Q2 GDP is actually 1.7% after revised data on non-durable goods.
     
    So now that everything bad for the middle class is good for the upper class, we should in fact break higher on this news…..LOL


  139. if gold was going to fail here, it would have by now, which means that this is probably closer to the midpoint of the current rally.  It is tought to guess where silver will go, it greatly out performs gold at the end of these rallies, so it could have another 8% in it while gold probably only has 2-3% max.


  140. Nicha, ATM or OTM options always have more premium than ITM. it is because you get more leverage.


  141. Sold some STEC. almost all out, will sell the rest before close.


  142.  are you covering any VVUS short here or letting it ride through ARNA earnings. 


  143.  might need to lighten NFLX or take of AMZN as it is turning out to be a Texas hedge, which is different than the O’hare spread


  144. @English, yes I agree. I’m out of both NFLX and AMZN as of now. Could get back in later.


  145. VVUS-letting it ride. Small position at this point. Don’t think anything from ARNA’s earnings could be a positive for them.


  146. Agreed on AMZN and NFLX


  147. I think we will probably just keep 1/3 of each…


  148. Should have sold some NFLX earlier. But it did look very weak at that point.


  149. Let’s see how those charts look in the last hour


  150.  I agree, would be easier if AAPL wasn’t a pig  and provided some help, but it is dead in the water for now, only participating to the downside.  I still think it is telling us something we will soon see.  I think margin compression is the worry on AAPL now that all there products are entering the copy cat phase.  Soon these devices will be like flat panel tv’s and they will all be of similar quality and the price point will be the distinguishing factor.  Is that what AAPL stock is saying, perhaps


  151. Well, the big competitive advantage that Apple has is the software+hardware combination that is very difficult to copy/replicate. Esepcailly on the iPhone/iPad.


  152. Opt, do you LLTC as a short (chart I mean) ?


  153.  LLTC-I do like that chart, especially if it breaks out of this bearish flag. But the options are very very bad.


  154.  going to be time to short ANF again soon, i can feel it


  155. Keeping 2/3 NFLX and 1/3 AMZN After all


  156. Our old friend ANF :-)


  157.  Hm. Wish AMZN and NFLX would fall with the market. Still a little bit of time! :)


  158.  opposite day


  159.  STEC ripping of course


  160.  Well, of course…


  161. I really like the dollar here for a bounce. 


  162. I am long the dollar at 80.695, stop at a close below 80.55.  Good hedge for my gold and silver longs as well, although I think we may see both of them move up here


  163.  

    Arena Pharma downgraded to Market Perform from Outperform at Leerink
    Leerink downgraded Arena Pharma following the company’s Q2 results citing valuation and a lack of near-term catalysts. Note shares were also downgraded at Hapoalim this morning.


  164.  

    Arena Pharma downgraded at Hapoalim
    As reported previously, Hapoalim downgraded Arena Pharma to Hold from Buy. The firm cites valuation for the downgrade. Target to $6.50 from $5.


  165.  Lack of near-term catalysts?


  166.  

    Orexigen downgraded to Hold from Buy at Lazard Capital
    Lazard Capital downgraded Orexigen as they believe the September 15 FDA advisory panel will review data from the SCOUT trial of Meridia, which will have implications on the approvability of Contrave.


  167.  

    Research in Motion’s Torch and new OS not a game changer, says Goldman
    Goldman said the BlackBerry Torch and 6 OS are not game changers and will not "fend off" threats from Apple or Android. The firm mantains its Sell rating on Research in Motion shares. Target $50.


  168.  

    Research in Motion better positioned with Torch, says Oppenheimer
    Oppenheimer believes that RIMM is better positioned to compete in the smartphone market after launching the Torch, but the firm thinks it’s too early to tell if the device will succeed in attracting consumers. However the firm maintains an Outperform rating on RIMM


  169.  

    Dendreon’s reimbursement overhangs lifting, says Canaccord
    Canaccord said reimbursement overhangs are lifting with 9/15 Medicare contractors establishing guidelines. The firm continues to be buyers of shares and reiterates its Buy rating and $60 price target


  170.  Blackberry Torch- Seriously, that’s the best they could do?


  171.  yah, that blackberry is pretty lame


  172.  It almost seems like they are trying to drive the price of ARNA down right before the FDA meeting.


  173.  bought a little RIMM puts to start, maybe make it something


  174. all out gold and silver


  175.  Bought a little bit of RIMM puts as well. Will add later.


  176.  I also added a bit of ARNA


  177.  DNDN - From what I can infer from the conference call (and I could be wrong), Medicare is looking into reimbursement (which caused the price to drop recently) because they want to get an understanding of how big the off label market might be.  Many people thought that medicare investigation was because they didn’t like the $93,000 price tag but that appears not to be the case.

     

    Medicare usually allows doctors the leeway to prescribe a drug off label. For example many doctors write beta blocker for headaches even though it may not be on the label approved for this purpose it is known to work. What medicare is wondering is what their exposure might be like if doctors wrote Provenge off label.

     

    If Medicare decides to reimburse off-label or can’t find a way to enforce the label, then many urologists will be prescribing Provenge earlier in the cycle of the disease.  If that happens instead of $2.5 billion market the potential might be 5 times larger.

     

     


  178.  bought back the weekly 120′s in AMZN 


  179.  Need to find a good call today


  180. the last 2 weeks have been outstanding for me


  181.  How are you doing with the weeklies so far?


  182.  That’s great, Blake. Your timing has been amazing indeed.


  183.  Opt, are holding Nflx for now


  184. Happy days are here again for Pcln. Amazing


  185.  weekly’s fine. i have not been adding back month, just selling the OTM weekly’s on the FRIDAY before and they lose  a lot over the weekend, then scaling out.  In AMZN I sold the 115 into the dip and they quickly lose 90% of their value as the stock climbed. I then covered those and sold the 120′s for 1.70 and bought those back for .25c.  I was just playing the fact that if the stock fell it would have to outpace the decay and would require some trading.  


  186.  DELL falling


  187.  Yes, holding for now. Should probably have been disciplined yesterday. Let’s see what happens today.


  188.  AMZN just going to test the 200 and NFLX not much resistance till 110, maybe tests the 113.34 50dma


  189.  RIMM very weak. DELL weak as well.


  190.  CSCO moving higher, 24 was the number I was looking for it to break.  The 200 is at 24.27


  191.  should have bought more RIMM puts, gonna end up being a small position now. Got some short at 55 though


  192.  /OS sold 1/3 FDX calls


  193.  AAPL is very frustrating.


  194. Blake – thank you for the gold trade.


  195.  /OS sold 1/3 AAPL calls.


  196.  yah AAPL is the first thing sold if the market even ticks down.  


  197.  RIMM keeps going. Not at all what I would like in terms of size, but it pays a little bit for that annoying NFLX…


  198. Nice call on RIMM, English.


  199.  sold a little RIMM here against support, not much, will buy back on a bounce


  200.  Thought I was good covering with 37′s and 38′s on DNDN yesterday..


  201.  DNDN looks good long term, i am not touching it for a swing trade after it shook me out $10 ago


  202.  Now I hope AAPL collapses to my 180 target and leads the Nasdaq lower. NFLX and AMZN can’t handle a $180 AAPL


  203.  OREX acting well. Would be great to break $5.50


  204. perfect timing on my gold exit and entry on the dollar!!!  I should just quit now, something bad has to happen, everything is running too smoothly


  205.  VVUS looking good as well. I have a smaller position in this one though.


  206.  added a little AMZN puts here on that 60 minute SPX candle


  207.  just playing it against the 200, if it gets through I will get out. Custer’s last stand


  208.  DELL at the 50


  209.  covered a little VVUS short here as well


  210.  Maybe NFLX can do the opposite of yesterday


  211. this is probably the right time to short gold, but I am not comfortable with it right now, it could easily pop to 1220.


  212.  everything is just trading so technically.  AMZN made a text book bull flag, and needed to go higher, which immediately took it to the 50, then the path of least resistance was the 200.  Now that this is over the computers will walk away, they are not interested in owning anything.  No reason for them to play AAPL, they have 4 months worth of overhead resistance to get through before they even get triggered to target.


  213.  Blake- i agree. I like the 5 waves down completed and was looking for a 50% retrace on the GLD what you should see.  Text book so far for a move lower now below the lows put in the other day


  214. Looking at NEM as a possible long.


  215.  Trading on technicals. Well, look at that chart and the line at the 100…

     


  216. albo,  I know you know what you are doing with your trades, but NEM has been very weak given the recent action in precious metals…if we are due for a pullback in gold, NEM will get hit pretty hard, in my opinion


  217. engish,  I don’t think it is 5 waves down though.  isn’t there a rule that wave 4 cannot overlap with wave 1?  If that is the case, then it doesn’t fit 5 waves, right?


  218. Thanks, Blake.


  219.  I will try to find a link to a micro count and i will peruse the sight for the rules
     
    From Monday nights STU

    [Gold] ended today a few bucks above Friday’s close. Today was the fourth straight up close for spot prices, still, gold has yet to retrace even the minimal .382 ($1199) of the decline from the June 21 high at $1265.60. Once the present rally from $1157.75 (Jul. 27) exhausts, prices should resume the selloff that started on June 21. The downside range of $1033-$1043 remains the initial target for the next leg lower.


  220. what do u think of PCLN? Do u expect a pullback?


  221. shorted 1/2 position gold at 1202.5, stop at high of day


  222. english, I don’t know about a decline that steep, but i can definitely see a move lower to around 1135, that was my target


  223.  Blake- yes a wave 4 should not overlap wave 1.  I have posted this question to Prechter, he usually responds in a few days.  Hopefully they will post their count. I will look back over the last several issues and see if they mentioned anything of their count as it played out.


  224. i closed the gold short for break even, I need to slow down, that was a stupid trade


  225. Opt- What are your thoughts on GLUU after their quarter?


  226.  GLUU-Not anything really suprising. My feeling though is that they are doing all the right moves here, and have some very good games coming out.


  227.  who is long RIG here?


  228.  GOOG breaking out


  229.  DELL going for it’s seventh bounce off support


  230. pretcher has been calling for gold to drop hard for years, and can’t get it right.  It will be time to quit going long gold when he finally turns bullish.  I think I will use that as my signal that the gold bull market is over


  231. Rig – I closed yesterday because I relied on TOS that stated earnings were pre-market today. Oh Well.


  232.  bought back a little RIMM puts on this bounce


  233.  20% on pcln is ridiculous. Irrational exurberance


  234.  PCLN-I would not short it here yet. Wait for it to turn first,


  235.  Very risky. If you short, go with small size and good stop.


  236. RIG--3.5 R right now!!


  237.  /OB bought somd SNDK calls. 1/2 position. Also added some RIMM puts. Almost 1/2


  238.  $44 stop in SNDK and $56 in RIMM


  239. Opt: Any signal to short YHOO since having such a hard time breaking 14?


  240.  Yes, $44 and $56 looks good.


  241.  YHOO-I would wait. Looks like a rounded bottom so far to me, but that could change.


  242. optrader;
    I own RIG shares at  $67.00, what is your take on it continuing up and would it be smart to sell call options ?


  243.  RIG-I like that chart a lot. That being said, you can sell some 57.50′s. They have some nice premium in them, and will protect some of your profits.


  244. Optrader;
    on RIG sell calls $57.50, what month?


  245.  August. Just sell a little bit though, not as many as you own the stock. Maybe 1/3.


  246.  DELL testing the bottom again


  247.  Lets go DELL….just a little lower….


  248.  AMZN and NFLX just machines


  249.  that 144 target for the right shoulder is looking good now, anyone flip and go long when the trend changed at 120?


  250.  Sadly no. You gonna close AMZN here, or wait and see how it does the rest of the day…?


  251.  took AMZN 3 months to trend down what it made in 3 days, finding those trend reversals can be very profitable if you can find them.  Delta is very low now so will just wait till the end of day probably unless OPT sees it differently


  252.  Opt, whats the strategy on Nflx? My thinking is if the chart has turned against us and the next level of resistance is at 112 or higher should we not be exiting the position thats going against us. I’m new at this so let me know what your seeing


  253.  CSCO nice jump to the 200


  254.  anyone in GOOG?


  255. anyone else feel a pullback coming?


  256.  Dent, yes we should have sold yesterday. Just got stubborn, good lesson to learn. But remember, this is a portfolio first and foremost. So we are losing on this one today, and AMZN but making money on DELL, FDX, MON and already small profits in RIMM and SNDK. Let’s see what happens today, and if at the end of the day we still want to keep some for balance. 

    The fact is that when the market drops NFLX drops faster, so it might be good to keep for balance.


  257.  done buying RIMM puts


  258.  /OS sold 1/3 SNDK calls. Small profit, but was able to book some thanks to the $0.01 spread on options (love those). Will probably buy back later, but it looks stuck here.


  259.  I feel a pullback coming everyday Blake…LOL


  260. hahaha


  261.  By the way, we were not THAT undisciplined on NFLX yesterday. It closed still in the flag. And we are only at our stop right now ($5), with 1/3 already sold with a good profit.


  262. This dollar trade I opened this morning is already a 3.2R…very lucky lately


  263.  What happened to STEC?


  264. unfortunately I only risked 0.5% of my account on it, so not a huge gain for me, but still nice for a day trade


  265.  STEC, no idea


  266.  WOW, Blake! Amazing.


  267.  And not much to do with luck.


  268. wish i would haev kept that gold short too


  269. thanks opt


  270.  I know it’s bad but I almost want to add some NFLX.


  271. bought back gold here


  272. 1196.6


  273.  not too bad an idea, as long as it is accompanied by a plan to hard exit


  274. closed dollar


  275.  Opt, You are a braver man than I. I thought about it but  could’nt  bring myself to pull the trigger. 


  276.  that being said, we are leaning 2/3 short here as is


  277.  1/3 out at 95.65 we could wait for a bit of an uglier candle to get back in and still have a nice lean on that 1/3 being $13 lower to improve our entry


  278.  Yes, not doing it…


  279.  "On Tuesday, Research In Motion needed a miracle. It needed a fresh-faced BlackBerry and an operating system that made people say "whoa." Yet when it took the stage to unveil the BlackBerry Torch and the BlackBerry 6 operating system, one thing became clear: These were not heaven sent," Wilson Rothman reports for MSNBC. "This could very well mean the end for the BlackBerry."


  280.  ARNA-Listened to the CC. All good. They announced that their factory was inspected by FDA and passed. Also said that their supplier of the active material was approved.  This is big news. 

     

    There are 3 parts to a drug application.  The efficacy & Safety. The label. The CMC. CMC = Chemistry, Manufacturing and Controls.  We now know the CMC part passed. 

     


  281. bought a little DELL stock against these lows hoping for a breakdown for once


  282.  Now let’s see RIMM break $53.


  283.  we need a GS upgrade of RIMM to solidify it’s demise


  284.  FDX moving higher, nothing till 86 really, maybe 90 if it wants to catch up to UPS


  285.  Hum…Is RIMM the next PALM?


  286.  yes


  287. closed gold for a small profit.  I am done for the day, I have some big profits and feel like I need to cool off before I pull a big losing trade


  288. English, long RIG at 46. unfortunately, earnings are today after close.


  289.  This run in AMZN is ridiculous, ater the earnings they showed.


  290.  Opt – i’m sure one day it will collapse $20. Hopefully someone still has puts at that point…


  291.  AMZN just being raised on the NBBO. Probably not too many netted trades in this.  Just will be better to short when the machines turn off. I would not be surprised for GETCO to have traded 80% of the volume in AMZN today and will go home long zero shares.


  292. Opt / English, 1140 is the next resistance for SPX. DO you agree?


  293.  1140-If it breaks the 100, yes.


  294.  1140 sure, the bigger resistance people will look at and I am hearing is really the 1170 area.  


  295.  SNDK breaking $46


  296.  I am back on the SNDK train with it breaking 46


  297.  Done buying RIMM. Only had to add a couple here.


  298.  FDX has been climbing nice and steady all day


  299. Stodgy old GE trading above 200dMA.


  300. AMZN has been going up due to Barnes and Noble putting itself up for sale. Not sure why NFLX is so strong – there were rumors that AMZN is going to buy NFLX =-0


  301.  AMZN buying NFLX would do wonders for our short AMZN position, that would be the worst move ever


  302. English, you are still short AMZN? I thought you exited yesterday.


  303. bclb – Yes, see: August 4th, 2010 at 12:18 pm post. ;-)


  304. As usual, the price movement in AMZN preceded the B&N news. I think around Thursday of last week, the stock started moving from 116. I can’t help believe that there is something afoot with NFLX. The move yesterday from 98 was too weird – there is definitely some news that is to come out shortly.


  305.  I have 1/3 AMZN left


  306. Opt, I have to say your FDX call was a thing of beauty ;-)


  307.  FDX almost at our first target here of 86


  308. What does the next stop for GOOG look like? I don’t have access to charts today.


  309.  GOOG- if we head higher overall I like it to 538 and change with a little stop off at 520 on the way. Of course this is if the market can keep chugging.  Everything will just gravitate to the laggards


  310. diamond,  I hate it when I do that!

     


  311.  So, maybe back into FULL SNDK and sell 1/3 RIMM or buyback 1/3 AAPL?


  312. Covered some CELG leaps here at 200dMA and up against Bollinger Band.


  313.  FDX is strong, but I think 1/3 got away from us. Maybe let the last 1/3 run loose like bull


  314.  No trades here, I like our mix.


  315.  I’d rather buy back the 1/3 SNDK on a pullback.


  316. OK


  317.  sold out my long DELL stock


  318. Leap Wireless’ Cricket Hops On to National Stage
    By THE ASSOCIATED PRESS
    Published: August 4, 2010
     
    NEW YORK (AP) — Leap is taking its Cricket prepaid cellular service from a regional to a national player through a deal with Sprint Nextel Corp.
     
    San Diego-based Leap Wireless International Inc. has been selling Cricket where it has its own network, in cities including Houston, Cincinnati, Savannah, Ga., and Chattanooga, Tenn. It also has roaming agreements with other carriers, so subscribers could use their phones outside Leap’s network.
     
    In a new strategy announced Tuesday, Leap will now sell phones and service outside its network through big-box retailers. Sprint will provide service where Leap doesn’t have it.
     


  319. bought back my dollar position from yesterday.  I really like it here for a bounce to at least 81.75 for starters.


  320.  

    RIM’s Lazaridis: Governments’ action undermines electronic commerce, WSJ says
    Research In Motion (RIMM) co-CEO Michael Lazaridis said that governments seeking to ban the firm’s BlackBerry phones risk undermining the growth of electronic commerce by demanding access to secure communications and transactions, the Wall Street Journal reports.


  321.  

    Google says 200,000 Android devices activated per day, TechCrunch reports
    There are now 200,000 devices that use Google’s (GOOG) Android operating system activated each day, up from 160,000 in June, Google CEO Eric Schmidt said yesterday, according to TechCrunch. Asked whether revenue from Android justified the project, Schmidt said, ""Trust me that revenue {from search on Android devices} is large enough to pay for all of the Android activities and a whole bunch more.


  322.  

    Dish Network looking to offer live TV streaming on iPad, AP reports
    Dish Network (DISH) is planning to offer a new feature under which subscribers will be able to watch live satellite TV on their mobile devices, the Associated Press. The feature will be offered on the iPad (AAPL), iPhone, iPod Touch and BlackBerry (RIMM) devices in September and on phones using Google’s (GOOG) Android in October. Subscribers will not need special hardware and will not be charged for the feature. 


  323.  MON increased their dividend


  324.  Nice, here goes the stock again…


  325.  some a few AUG 62.50′s against my SEP 60 calls here, still bigger than 2/3 


  326.  /OB bought back 1/3 FDX Calls


  327.  Don’t look at DELL


  328.  I’m not staring at it, i promise…LOL  I was going to say the same thing


  329.  Opt, I am pretty sure I am not getting all the posts because I can’t follow the conversation seems there are posts missing. Since the open I have 5 posts only from you and english. I that correct


  330.  dent, yes that is pretty much it. We are not big on talking here, just focusing on the trades and making money. Most members are silent and just watch. So far this morning everything is going smoothly so not much to say ;-)


  331.  what’s got CAT and DE all riled up?


  332.  Thanks


  333.  ohh…I am pretty much back to full on MON..


  334.  Personally, I enjoy watching the developing narrative between Opt and English.  


  335.  Sold a tiny bit of the MON 65′s.


  336.  tempted to sell that 1/3 of FDX out here against the high, what do you think?


  337. new member--this is going to sound stupid but how do i know the strike price and month you are buying or selling the stock at ?
    Tx


  338.  savitri- Welcome!  We buy front month until 2 weeks prior, then we go out to September in this case.  Still in AUG now through tomorrow basically.  We buy ATM or slightly ITM options, where the delta is as close to .50 as possible.  


  339. tx so much


  340.  savitri-welcome to the board. You should read teh FAQ, it is a good start. And don’t hesitate to ask questions.

    You can find the FAQ here


  341.  Glad we did not short ANF.


  342.  we weren’t going to yet, merely taking notice that it was elevating for a future fall.  When the time is right, until then we let the kids load up on cargo shorts and plaid for back to school


  343.  Believe it or not, but when I was in France I noticed how popular they are. It is kind of hip to wear A&F over there…But these french people, what do they know about fashion anyway…

    In any case, the issue is not there really for them. It is all the stores in the US with crazy rents that are empty most of the time.


  344.  CAT and DE are reacting to this wheat/drought/whatever thing going on if anyone was curious.  CAGC is a Chinese fert name thats starting to come out of a long base.


  345.  CAGC-I like that chart a lot. Especially on a break of $14.


  346.  DELL always saved back above 13


  347.  Would be great to see RIMM break $52


  348. I’ve been using Schwab.  Just curious-is there a platform that you prefer?


  349.  rdtruitt, we like Think Or Swim a lot here. Great software for options.


  350. back in gold at 1193.8


  351. sorry for the late post on that one but I was in a meeting


  352. rdtruitt – Schwab is not the best option platform. 
     
    If you like trading options …
    Contact scott at thinkorswim dot com, and mention your PSW membership.


  353.  And PCLN keeps going. Hope you guys did not short yesterday.


  354.  Loving the OREX trade right now


  355.  Albo, your timing was perfect on this one.


  356.  RIMM fast approaching support at 52.15


  357.  Opt – ARNA is trading in a tight range.  Do you think this is consolidation before another break out?


  358. Opt, I did not short Pcln, thanks for the word of caution yesterday


  359.  How is NFLX up .03c and who is bidding up DELL again for the upteenth time over 13?


  360.  ARNA-It looks like it. Let’s see. I think it is stilla good lT play, even after the big run. Just have to forget about it until the next move.


  361. wow, this RIG keeps on going, somewhat like MON ;-)


  362. closed gold at 1197.2…keeping my dollar futures from this morning


  363. Opt / English, what do you think of HPQ for a short?


  364.  HPQ looks good and maybe less defenders than DELL


  365.  watching RIMM at support here


  366.  Good job, everyone who’s in RIG!!!


  367.  HPQ looks good indeed for short. I do like the company much better than DELL though…


  368.  HPQ-Watch 50MA.


  369. closed out the dollar trade here


  370.  I think it is already amazing that ARNA is consolidating at those levels, after the crazy move the last couple of weeks.


  371.  does DELL ever wear on your patience?


  372. Opt / English, ARO as short? what do you think?


  373.  ARO too illiquid, never again


  374. ARO seems extended  to me for now.


  375.  DELL-Yes it does. Trying to keep my cool though. It is printing lower lows and lower highs. I don’t like this hammer at all, but as long as it stays below the 50 the trend is good.


  376.  ARO-I like it, but not all in right away. At the 200 was a better entry obviously. you can do 1/2 now, and 1/2 closer to the 5MA


  377. oh yeah, English is right. Options are terrible.


  378.  I can watch this guy just bid it up, not much trades on the offer, then he moves his bid up. i guarantee he will walk it back over the 50 before the close


  379. watching RIMM myself and wondering if it can make it through all that overhead resistance.


  380.  RIMM- watching the downtrend on the 5 minute chart.  It bounced right at support and needs to get back over 52.55 to have a shot back up to 53-53.40 today. Volume is very light on RIMM today, so the selling pressure is getting a little weaker as we go


  381.  actually have a nice wedge to follow in RIMM on the chart today, the 5 minute.  Still has room to move down, but should resolve with a spike up if it breaks above the falling wedge at some point. i will use that to lighten up and let it run down the channel until it ends


  382. English how do you realize the selling pressure is getting weak. Thanks


  383. ARO : thanks Opt , English. I’m looking for a gap down to 24 so the option spreads are not a barrier for me. They revised their earning estimates down this morning so there’s a fair bit of resistance on the upside. Took a small position – looking for under 25, out at 27.


  384.  just looking at the declining volume as it wedges down. It has plenty of more room to run if it chooses, but when you see something wedge after a nice fall and the volume declines, it usually resolves with a spike in volume to the upside when the shorts start to take profit on the breakout.   The spike to the upside could be small, like back to 53 or something.  the trend is definitely down in price and fundamentals.  just a trade I am watching


  385.  oh, the excitement is hard to take


  386. OREX – Well played Opt.
    PCS -   Looking strong.  Am I the only one still in it ?


  387. Any one following EDZ?


  388.  GO NFLX!…..LOL


  389. This is a little off the wall, but things are slow.
    A coupla days ago I put on a spread on YHOO in my LTP which i love, but Opt you won’t.
    Bought ’12 Jan 15 leaps.
    Sold  ’12 Jan 20 leaps.
    Sold  ’12 Jan 12.5 puts.
    I took in $.30 per spread.  Profit potential $5 per spread.
    Downside:  May have to buy YHOO at 12.5 at some point.  No money out of pocket, but tying up some
    buying power.   
    I’ll gladly pay 12.5 for YHOO.  I’m a big believer in Carol Bartz !
    s


  390. I am back in gold and silver again….long.   I hate jumping in and out, but just trying to keep my profits in these choppy conditions.  Might have 10-20 up left in gold before a pullback


  391.  NFLX is just unreal….Well, at least our delta has reduced considerably on it.


  392.  ALbo, I do like it in fact. If you like YHOO long term.


  393.  PCS-Been out for a while…


  394.  we will be able to get a good NFLX short off tomorrow following the jobs number, maybe in the 120 area if they fill the gap. that is one positive


  395.  I bet I know what you are looking at


  396.  no trade


  397. is there a good day of the week to buy put and call options?


  398. also is there a good time of day to buy options? Thanks


  399.  No, does not matter much.


  400. Hello Opt,
    I have been looking at your program but have not traded yet.  I got the below listed email yesterday.  The wording confused me a bit because in my understanding of options trading, when the term "bought back" is used it is generally associated with the naked selling of an option after which the option is ‘bought back’ to close the position. However I saw somewhere that you do not sell naked.   Would clearer languange be "sold 1/3 position".  
      /OB bought back 1/3 FDX Calls
    - Optrader
     


  401.  fjd10595- When we say " bought back" , we literally mean we bought back the calls that we sold.  In this case we sold 1/3 of our FDX position.  So we sold enough of our calls to lower our delta to 1/3 of our original position delta.  Then later we " bought back" the calls we sold to raise our position back to 2/3 of our original delta.


  402. gold and silver doing great this morning. I will be exiting today and this should conclude my coverage of the current rally!  It probably has further to go, but once silver gets above 18.8, i will be heading for the exits.  Next week it will probably push a bit higher, but I don’t want to get caught in the move down.


  403.  What a great week, Blake.


  404. thanks opt!  I really has been great!  I have made 15 trades, 13 winners, and the 2 losers were both smaller than my smallest gain.  Of course I have had weeks where I could say the opposite, but this has just been a lucky week for me.  It is going to be a good weekend.


  405.  Aeropostale downgraded to Market Perform from Outperform at Wells Fargo 


  406.  Don’t spend it all on one drink.


  407. Blake, don’t be short into fed meeting next week.  If QE2 announced this might just explode.  I have not touched my longs despite you tempting me a few times with going flat.  Just sold a little premium against the positions, but that’s about it.  Obviously will adjust everything after the verdict.


  408. Hi Opt -  Back from break.  Slowly entering some trades .. Still in Europe ?


  409. thanks lapper!  I more than likely will be looking to go short in the next week or 2, but i will make sure to be in cash for the fed meeting.  I am expecting another push down into the end of august.  If we get it…we should be set up for a really nice multi-month rally into the end of the year.
     
    Opt-  I will be sure to spread it out over many different types of liquor and wine.  My sister and her husband are coming in tow, so I need to show them a good time.


  410.  /OS sold 1/3 NFLX puts


  411.  Hi Partha, welcome back!
    No, I am back in the US.


  412.  Any news out on RIMM.  Fast opening drop to 51.65 and now turned positive to 52.55


  413. NEM – Sold 1/2.


  414.  /OS sold 1/3 SNDK calls


  415.  OPT, my NFLX delta is already less than 1/3.  How are you sitting?


  416. albo-  good call on NEM, you were right on that one


  417. Also less then 1/3 on NFLX here because of delta…


  418. Thanks, Blake.  Great job with gold futures.  What charting software do you use?


  419. I use thinkorswim


  420.  NFLX-My delta is VERY small now. I was almost at 1/3 and sold 1/2 of it. I am actually thinking about buying some back at the 50MA, with higher strike.


  421. At $114.55, NFLX would have filled the gap.


  422.  yah, i did not sell any as it was trading 111 when I saw your post.  I also was not sure what you meant as I was below 1/3 as is.


  423. Opt- Have you considered buying  some long term puts on RIMM and trading against them?


  424. Still learning here.  I learned that delta describes the chage ratio between the underlying and an option.
    English – Are you referring to that when you say, "my NFLX delta is already less than 1/3."?  Or, is there another delta I need to learn?  thx.


  425.  rdtruitt- we look at our delta in dollars.  If we started the position and you needed -500 deltas, you would buy 10 ATM puts, .50 delta.  So as NFLX moved against us the delta of those options went from ..50 to say .15.  SInce you have 10 contracts, your delta would now be 10 x .15 =  -150 deltas.  Since 1/3 of 500 is 165, you have less than 1/3 deltas with your current position


  426.  Added some NFLX. Back to almost 1/3


  427.  Albo, no I have not. But I like the idea.


  428.  Yes, I sold almost at opening on NFLX. Just got tired of it doing the same thing every morning while we just watch.


  429. would you get into any ag stocks now


  430. Bought a small position in Pharmboy’s CRIS, just fas a spec.


  431. just for a spec.


  432. closed gold, still in silver for now


  433. out of gold at 1212.8, but like i said, i would bet it pushes even higher early next week, i just like to sell on strength and don’t like to get caught in the move down at all


  434.  Ag stocks-Well we are in MON already. Chart still looks good, and not as overextended as AGU, MOS and POT.


  435. closed out silver, all in cash for the weekend


  436.  It is very important that the US economy keep NFLX elevated to stave off fear of deflation…LOL


  437. English – I get it.  As your puts declined in value, your delta decreased from .5 to .15 meaning you are now lighter by about 2/3s of your investment.  Can you please explain the expression "you needed -500 deltas"?  I don’ t get the "needed" part.  thx.


  438.  rdtruitt- we first figure where our stop is, the distance to that stop from the current price of the stock. If NFLX is 110 and our stop is 115, then our stop is $5.  From that we take the amount you are wagering on this trades, say $3000 if you had a $100,000 account.  That would be 3% of your account.  You then take $3000 / $5( your stop) = 600. So you need to put on a position that gets you short 600 deltas, in this example.  Thus, you " need "  - 600 deltas.


  439. English – It’s a bit more scientific than I imagined.  thx.


  440.  UGLY candle in MON


  441. MON, agreed there seems to be a nice base underneath to support it.


  442.  rd, here is the way i think about it which may be more intuitive.  Using the above example you are risking $3000, stop is $5.  the option delta, lets say, is 0.5.  To figure out the correct amount of options to purchase, you take $5 x the delta, this gives you the amount the option should move given a $5 move in the stock.  So you would expect the option to lose $2.50 in this case with delta of 0.5.  
    Thus, dividing $3000 by 2.50 will give me the number of contracts i need to buy (remember to divide by 100 for the option multiplier).  In this case i’m buying options on 1200 shares or 12 contracts.  The number of deltas in this trade is thus 1200 x 0.5 or 600.  So when you sell one third, your delta should move to 400.  Putting this in practice, lets say the stock falls and the delta moves to 0.65 on these puts.  I have 12 contracts with a 0.65 delta (puts have a negative delta but i think in absolute values).  So my total delta is now 780.  When you sell a third you still go down to 400, so you would need to sell nearly half of the contracts to get to 400.  
    LIkewise, if the position goes against you and the option delta is now 0.40, your total delta is now 1200 x 0.40 or 480 so you would only need to sell 80 deltas or 2 contracts to get to a third.  
    This is my understanding of the madness, let me know if I’m wrong.  
    PS – the market is schizo today.


  443.  ES sitting right on support here on the daily


  444.  parker- that is correct. 


  445.  now you should understand why some of these guys talk about shaving a few off a position ’cause the delta was growing.
     
     Opt should probably create a new term for total delta’s as this is a common misunderstanding for people around here.  


  446.  Good explanation, Parker. This is correct.

    To make it VERY simple, when a position goes our way the delta increases (options get more in the money), so we need to sell some contracts to reduce our exposure.

    When a position goes against us, the delta decreases (options get more out of the money). If we want to profit from a bounce we need to buy more contracts to increase our exposure.


  447. Another question concerning the portfolio.  Suppose I am bullish at this moment and I observe on my screen call prices lower than entry prices showing above.  Is it dangerous at this time to take up one of these positions at what seems a low price?


  448.  MON-Or just a test of the 5MA


  449.  rdtruitt, not at all. The fact is that entries do not matter that much. if you like one of those positions, just pick a stop, and enter. 


  450. "When a position goes against us, the delta decreases (options get more out of the money). If we want to profit from a bounce we need to buy more contracts to increase our exposure."
     
    But how often do you do this?  If something goes against, the lower delta is what keeps us from not fighting the trend in the wrong direction.  I am assuming that when you add delta back you do so following some guideline.  We usually post or state when we add correct?  We do not add back delta to stay at 1/3 or 2/3 etc. at all times, as we would be constantly buying more contracts into a move against us, compounding the losses.  Not adding to NFLX and allowing the delta to fall has kept the loss contained


  451.  /OS sold 1/3 DELL puts


  452.  I VERY rarely do it. But I somewhat did it on NFLX this morning for example (not increased total delta yet, but I did buy higher delta contracts). But yes, this is very rare, as usually the delta works with us, reducing our size on positions going against us. And "Only losers add to losers".


  453.  DELL-My strategy here is that if I sell 1/3, this time it probably won’t bounce and keep going down. So I am sacrifying one 1/3 for the benefit of the other 1/3.


  454.  yes, I just wanted to clarify for those that may have gotten confused by that. i know I made that mistake at first before really understanding the advantage of declining and of growing delta.  It is key to allow these two forces to work in making the strategy successful.   


  455.  yes, the reason I take 1/3 off every time


  456.  Opt, will you be all in SEP by the end of the day, if not already?


  457.  SEP? 


  458.  yah, out of August and into September 


  459.  AKAM looking better


  460. ARO doing well on the downside. Strength in RIMM is puzzling.


  461. Opt – Re: your DELL strategy.   I’m tempted to go long NFLX for the benefit of everyone.


  462.  lots of stuck shorts in NFLX


  463.  No, I have not rolled yet. I am still in August. We still have 2 weeks, so no big rush.


  464.  Thanks, Albo.


  465.  Is there a an art or strategy to rolling to the next month?


  466.  I think it might get fun when VVUS breaks $5 again.


  467.  And PCLN is still going. Will probably test $300 soon.


  468.  Bethroe, we like to roll to next month before the last week of expiration. Because this is when premiums evaporate fast.


  469. Ok, done buying back NFLX puts. 1/3 position now. Gap is closed.


  470.  AAPL trying to break down through the 50


  471. Opt, NFLX : what is your stop?


  472. RIMM showing remarkable resiliance right here


  473.  NFLX-$5 stop.


  474.  RIMM still in the downtrend. As long as it stays below the 5MA.


  475. ARO : did anyone follow me on this one yesterday?


  476. Thanks OPT


  477.  /OB bought back 1/3 DELL puts sold earlier.


  478.  ARO-That was a great call, indeed!


  479.  don’t think i’ve experienced more intraday whipsaws in my career than the last couple of weeks.  had more gains evaporate intraday – getting frustrating.  


  480.  think its a testament to how thin the markets with the machines able to push things all over the place.  


  481.  mean reversion.  Any candle that strays too far from the 5dma must be reverted. That is straight form the top, executive order


  482.  Yes, it’s very often like that during the summer.


  483.  NFLX is insane, literally


  484.  I agree


  485. nflx would have been a great long 3 days earlier. from the chart, I mean.


  486. MEMO TO ALBO:
     

    HOME :: Investing / Stocks 


    Never Add to a Losing Trade

    We don’t want to ever say "never" because there are always exceptions to a rule but for the most part, you should "never", ever add to a losing position. There are only very few circumstance when you should. But if those circumstances do not exist, then you should never add to a losing trade, not EVER! We’ve talked about some of the few examples in the past when it is okay so we will not repeat them tonight. What we want to stress is why you should not add to a losing trade.
    Consistently averaging down into losing trades will almost guarantee that you will not succeed in the stock market in both the short or long term. 


  487.  NFLX just hit the under side of its long term trend line it broke through after earnings, this should be some good resistance 


  488.  Great memo, Albo.


  489. albo, very true. The expectation of winning in the long term is pretty much non-existent if you double-down like this.  This is what most people who get back even on 1 or 2 trades or even make money on these few trades don’t understand.


  490.  OK, who reversed their entire portfolio on the open?


  491.  Those days, with this market, it feels like we should reverse the portfolio every day.


  492.  English .Do you think IBM look like a short or should there be  another day of confirmation.


  493.  Those days, with this market, it feels like we should reverse the portfolio every day.


  494. Here’s the rationale behind the NFLX surge:
    http://www.thestreet.com/_yahoo/story/10829827/1/why-fewer-dvd-shipments-could-boost-netflix-stock.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
    I think there’s something more to it than this.


  495. This is a very tough market to trade. Such huge swings.


  496.  Not a nice way to end the week…Crazy market. Enjoy the weekend! 


  497.  IBM – no idea here, this is all bizarro 


  498.  Thanks, have a good weekend


  499. Have a good one all, I will be selling  "you’ve been mean reverted" T -shirts on the sidewalk all weekend to get back some of that NFLX cash…LOL. I will also be signing up for NFLX service and then promptly be canceling tomorrow to increase their churn numbers


  500. English :-) I’m sure you’ll like NFLX service better than NFLX stock.
    Look at HPQ : mark Hurd resigns due to sexual harrassment of a former contractor. This news was embedded in the price movement of the last few days. I’m continually amazed by how porous the boardrooms of these companies are.


  501.  HPQ- I saw that, and now they are bidding up DELL.  I think someone shorted HPQ the other day here.


  502. English, it was me ;-)
     

    arindamc
    August 5th, 2010 at 1:13 pm | Permalink  
    Opt / English, what do you think of HPQ for a short?


  503. Guys- new to the site and have tried to do my homework in order to avoid asking dumb questions but I do have two. First, when you say sold 1/3 are you actually selling 1/3 of your calls or puts or are you selling 1/3 of your position factoring in delta? Secondly, once you have taken a position and are following the stock, is there a time frame you use which gives you the best clarity on your chart? Thanks for your response and I look forward to getting to know some of you guys-Jim