Falcon, as an experienced options trader, I have noted that the posts from Ryan the last 24 hours are not making sense. I would warn you there is a strong chance he's making it all up.
Even if we were to give him the benefit of a doubt, the AAPL trades as quoted are a horrendous strategy.
Yeah, I'm testing AAPL puts again.....I'm making it up too....but just bought 1 AAPL March 23 2012 $585 puts at $14.00. I just feel like the correction in AAPL is coming, putting a stop at $8.75 though and going to watch it closely again.....Funny you mentioned that they don't make sense, hell, they still don't make sense to me too....but I would have bet my house yesterday that AAPL hits $600 by end of week. That's how strong the intraday tape was showing in the afternoon. Things look different today. AAPL is struggling, and I can almost see that large funds are locking some profits here.
Dare put your money in AAPL puts now Nine_ender? I don't have a guarantee, hence the stop loss, but we'll see if I'm right about AAPL falling back to at least $550 by end of next week.
Speaking of CREE, later in the day yesterday I added CREE April 30 calls at 1.50 to make a strangle out of my CREE 29 puts at 2.00.
But just like with any of these straddle/strangle positions the
same old dilema occurs, "how is this stock going to move enough to make me profitable?"
For instance the calls have easily hit a bid of 2.50 today making the calls worth +66% more than what I paid for them, but then the put bid was around 1.40 ( -.60 under cost).
So 2.50 (calls) plus 1.40 (puts) equals 3.90 pair minus a
3.50 pair debit = +.40 profit.
It just not worth trading for +11% profit (around +9% after commissions).
I haven't done a straddle or strangle in a long time and now I remember why!
Jeff
Hey Jeff,
Optionsxpress allows a strangle to be played with 1 commission cost only.....saves half the commission cost right there. But, you're right. The stock has to make a strong move in 1 or the other direction, and with something like CREE, I don't think we'll see that in 3 days. It might have to be a 2-3 week trade to make it last. Even had trouble with earning trades making enough of a move.
Optionsxpress allows a strangle to be played with 1 commission cost only.....saves half the commission cost right there. But, you're right. The stock has to make a strong move in 1 or the other direction, and with something like CREE, I don't think we'll see that in 3 days. It might have to be a 2-3 week trade to make it last. Even had trouble with earning trades making enough of a move.
I haven't done a straddle/strangle in 12 years and I already see
why I stopped doing these things.
"Its like watching the grass grow! First the puts are up.....but the total debit doesn't change much, then the calls are up.....but the total debit doesn't change much.
This takes time and patience and at my age I no longer have those qualities.
I set my limits and stops for either a +25% overall profit or a break-even plus commissions.
Ryan also take a look at the attached 5 year chart of the SPX.
I see smooth sailing to 1440-1450. If I was a betting man, I would bet no correction > -2% to that level.
Falcon, as an experienced options trader, I have noted that the posts from Ryan the last 24 hours are not making sense. I would warn you there is a strong chance he's making it all up.
Even if we were to give him the benefit of a doubt, the AAPL trades as quoted are a horrendous strategy.
There is a strong chance you're a fcuking hand puppet. You wouldn't know a good trade if it fell from the sky, landed on your face, and wiggled.
I spent the past two years, from the experts, to the hidden amateurs, criticizing my learning process, slow as it is. I have been insulted and told so many various ways of trading. Only ATTICUS had the guts to post his equity balance one time. ( making $20,000 a month at that time)
Anyway, I am chortling in my soup. As RYAN comes on here and confounds EVERYBODY using their pet strategies and standard book learning rules, by earning 555% in the last three months. I did look his strategy up. It is called BEHAVORIAL TRADING, and those that do it, are making fabulous amounts of money. Not too many people do it though as it goes against all the trading lore, posted on here by the diehards.
It is a diversified method of trading, more like using a shotgun with bird pellets. You also use ALL YOUR ACCOUNT practically every week. Takes intimate knowledge with stocks, which RYAN has from 5 years of trading earnings in stocks. Just making the switch to options which give more leverage. Violates all the rules put on over the last two years, by the professionals.
I just LUV to see his equity balance on here climbing like a space shuttle. I´m trying to adapt and test different variations of what he is doing on here to my own ideas. I couldn´t do what he is doing though, lack the background intimacy with stocks and earnings. There may be however, a way to adapt this to some graphical way of trading. In the meantime KEEP IT UP RYAN!
