ISIL reports earnings later tonight and from my DD and research and looking at the feb semiconductor sales etc..(have a subscription to next inning research), this is the one i am buying now... in some May 30 ISIL at 1.50 10 contracts isil at 1.50 for 1500 (UFHEF) again, i am just posting my plays...please do not follow this...i am just going on my quest to make 1k to 100k...
I think one has to be careful about taking a nice win and ignoring the lessons behind it. Kind of like someone in poker holding an Ace and King and betting big on getting two pairs based on other cards showing coming and actually hitting it. It does not make the bet the smartest one just because it worked out. The $60 Call was at around $2.60 when this trade idea surfaced and with $1,000 you could do the $60 calls as easily as the $65 calls. Instead of 20 $65 Calls, you could do 3 $60 Calls for $780. Those calls are now worth $5.70 for a profit of $3.10 or $930. Now your first reaction is to say that it is less than the profit on the $65 calls. But if GILDstalled at $63 or $64 the $65 calls woud have faded into almost nothing and produced a loss. The $60 Calls would still have a profit for your efforts. The $60 Call perhaps had a higher % chance of producing a profit based on the trader's assumptions. If you take the more probable position consistently, then in the long run you will make more money. Choosing the OTM ticket means you will lose more often than not and trade uphill at times. SO my points in this thread were to take the due diligence and apply it to higher probable positions for better profit potential. Even if GILD dropped back in price to $61, you would have some money to salvage from the position to get out while the $65 call would evaporate given the 2 days to expiration. Congrats to the OP on the trade, but look into different strike selections to improve yuour profits over the long haul, not just trade by trade P.S. At least the ISIL strike is ATM
I am expecting ISIL to have good numbers...my personal target on this is 3.00, but will gladly take 50% gain..again, you set your own targets here...
I agree totally. I could have played the april 60 or better yet may 60 calls and still realized a good gain and have a good deal of time on my side...thanks for the advice. i do appreciate that...
if i might make an observation, i think you simply overpaid. if for instance you found a stock trading at 63 and bought your 20 contracts at .40, that same 4 dollar move would have yielded a profit of $3200. If you make 10 trades, and are wrong half the time, you win 15k and lose 5k. The least active stocks seem to be the cheapest, at least that what I've observed in my limited experience. At least that is the way I see it. Im looking to do this consistently, but cheap OTM contracts, at peaks/valleys looking/hoping for retracements large enough to make 100%+++. It's a hell of alot easier to triple .60 cents, that $5 I also would like to turn 1k into 100k, a bunch of times. The only way to do so, I believe is going for it.
pattersb, the best way for you is to read some books before doing anything. Those OTM of inactive stocks are cheap because the stocks are inactive! As for option coach, just don't use poker as an analogy when clearly you are a fish. AK is a great drawing hand, and there are many reasons behind it to raise preflop.
You misread my post. I said holding an Ace King and betting everything on a specific turnout (2 pairs). I never said anything about folding or not playing the Ace King. The point was betting everything on a low probable event. At least a fish can read
i read enough books.... i could tell you the historical volatility (daily/weekly), in 5,12,16,26 day/week periods of a couple thousands stocks dating back to 2000, i could chart them, calculate accerlating rates, etc ... Sheese, I could give it to you in 5minute increments Also! I have the Data! Inactive = Option Contracts. I'm new to this, but Im quite certain that the option contract volume does not effect the price of the underlying. Like the underlying, if you have alot of people bidding on the option contracts, chances are the price will be high. Supply/Demand. I also know the most people fail at this, and I'd imagine most of them read books, suggesting spreads and blah... Im swinging for the fences...