Bought 16 HGG January 10 $15 puts at $1.30. Stock was upraged from equal weight to overweight and it opened up about 7%. Then it rallied for the remainder of the day, which I think was mostly short covering. Shares short were 17% of float as of end of august. finished up 20%.
My limit order for 50 MWA november 09 $5 puts was filled right before close for $.50. They went up 12% on news that they expanded a future planned stock offering from 27.5 to 32.3 million dollars. The stock took a hit when they first announced the stock offering a week ago but then began rallying. I think it is overbought and I don't consider the offering expansion good news. The money will not be used as investment or expansion, it is just to repay some debt. I also like the fact that they put in place a 30 day option to buy an additional 4 million shares to soak up any excess demand. That should put some nice selling pressure on the stock. I've got a looser stop because I want to give this trade more time to play out if it needs it.
BANG ON!!! F%^K the haters..... The fact you make a point to ignore the BS that goes on this forum tells me your 90% ahead of the rest... Catching knives isn't easy, but it can be done.....I've met a few people who have failed, and a few who have made a MOTSA!!!!! Your taking a position in the market when emotions are at the extreme, and you need to outsmart and outwit 95% of the market..... Not easy by any means but you seem to have a level head.... Put in the hard yards, embrace the swings....you'll get there.....It's not my style but will watch the thread with interest and chip in where I can.... All I can contribute is position sizing, position sizing.............oh and position sizing... Be ultra conservative with your initial capital...... I would be risking 1% of capital per trade.... nothing more.....Once you get into a rhythm get ULTRA aggressive with your profit... I like to think in terms of profits being the markets cash, not my own. My only risk is the cash I put in, nothing more. Why be aggressive with my own hard earned cash, when I can risk someone elses? And what better time to get aggresive, than when you have clearly been on the right track. 90% of people won't agree with me here but whatever.... 90% fail
it's doable. some of my setups are based on this very premise. the most important thing with this strategy is to maintain your discipline on the losers, and to get out of your winenrs in your timeframe (ie. don't hold them longer, which contradicts most normal trading strategies). you'll take the periodic hit on some unexpected news that goes counter, but as long as you don't take too large a position, you'll be ok. on cramer - make sure the gaps are big enough. i was in FLEX as well, but with the stock. sometimes, the cramer gap will actually run for longer than it should, almost always with a thin stock that has somewhat of a short interest near all time highs. cramer sells have much less of an impact than the buys. don't get overconfident, and remember, the most important thing is maintaining your initial stake.
also, just a warning; you'll find that sometimes, secondaries which don't collapse (near the price of the secondary) explode. jeff cooper included this in his book hit and run about 10 years ago or so. if you succeed, you'll eventually get a list of "here's rules / setups that won't work as well". i could be dead wrong, but buying the MWA puts on that technical setup looks ugly.
Saw that one coming, lucky you didn't lose a lot more on that one. You need to wait, wait, wait, and oh....wait. Get the perfect set-up then trade. Too aggressive is my downfall, you don't need to make a trade. Market is open like 24/7 now. Be super selective. Just my 2 cents.
I started trading when I was 19, that was over 5 years ago and I didn't have a clue. I got lucky and made a little my first year or 2, then the summer correction in 06 killed me. I think I lost close to half my account. That's when I learned your opinions on a stock moving too far are not an edge. My suggestion is to go pro, I finished college and 2 months after graduation went to a pro firm and started trading. Discretionary retail trading in my opinion is a losing game. You will bounce around and doubt yourself and will get hurt badly, the market will humble you. Would you have bought ELN down 40% because you thought it was an overreaction... probably, things like that will happen, not to say your strategy is flawed, but you say you want to buy with a trend after an overreaction, many times the overreaction is the end of the trend. If you are trading short term for a small bounce, then you are stepping in front of a train to pick up pennies.
We are. Your strategy is garbage. Plain and simple. I wasn't going to say it. You have no edge. PERIOD. Yeah that was me telling you to play with the 5k. If you don't want to do it, that's fine. But eventually you'll have to start listening to someone with plenty more experience. .......Probably once the market crushes one of those 20% positions you put on.