Added to my AAPL long position for the last time (reached my account's allowable % limit for 1 stock) at 648.30. I think this pullback is over and AAPL has begun a new rally to 700+. But no one except Mr. Market himself knows for sure....
its random... that head and shoulders can't predict how much they earned or loss ... thats the real kicker.. buying or selling anything at this point is an earnings play..
I wouldnt be looking at chart when looking at apple, the only reason for todays advance of 2% to 650 is because of the announcement of them holding an actual meeting on October 23rd about the ipad mini, reason for the last decline was because of the rumors last week about the so called ipad mini event, when investors found out apple didnt announce any plans the stock fell, now the stock rises once rumors became reality. Is the next advance to $700+, who knows, earnings are coming, either apple is above $700 or below $600 the night they announce earnings after the close.
hns is just a distribution pattern, they build a value area, run it up make a head then back to the value area,get everyone anxious for another runup, maybe a new high,sell into them and drop it,doesnt always work or drop but it does indicate distribution vs accumulation, a hns also, often will break the neck and return to it before the drop...when a new nightclub or restaurant opens and becomes the new hot spot,it has about a five year window,then something else takes it's place .aapl has been the bomb for how long now?
i'm not good at calling major reversals.. i'm better at buying high and selling low..haha.. i've managed to keep my loses low because i take alot over really really asymmetric payoff bets.. at minimum away from large binary bets.. lets just say we can't predict the future.. take a bet you don't know which way but you bet magnitude.. say it beats or misses by more then the implied 8 percent move.. which can change we aren't yet at the day before earnings.. thats a little over a fifty dollar move either direction.. i'd rather figure out a way to be wrong more often then right still make good profits.. and slowly get better intuition and get better at following it.. the fly that encompasses the implied move is to much of a position size for me.. the otm broken flys seem good takes care of vol collapse and is a cheap bet with limited risk.. my experience is .. options are usually priced pretty close to right.. if they are pricing in a 50 dollar move.. its not going to move 10 bucks!.. at least not in my opinion and at least not this earnings for apple.. idk just thinking. .
you're on the right path,the options didn't start out with the greeks, before anyone figured out the box they traded all over the place,the guys doing them kept it a secret and cleaned up,the math wizards added in all those greeks and changed the game,then the crts came in and had 25 traders on the floor with sheets coming down from upstairs giving the traders absolute values, they would take the 4 or 5 oex traders positions and tweak em all out to one large position, again with the sheets,so if you trade that way your risk is always defined small,the key ingredient is discipline and humility,just trade the facts, you don't take any bigheaded risks, i like to trade without a calculator and just look at those pinball bumpers and trade it from one to another
i over analyze myself and everyone else in real life.. so its no wonder i can easily complicate this.. geez how long have you been trading.. oex traders, crts, absolute values, sheets.. sheets.... sheets being binomial trees? oex traders? crts? i get the part where you were talking boxes used to be profitable, math wizards greeks changed game.. i get all that..
crt and timberhill were firms that ran tests and crunched numbers,they would give you a price on any option,no matter how deep in the money and illiquid and square it off with stock,they hired a lot of traders to stand in pits and represent them, the sheets were the printouts of the values and they had clerks coming in with adjusted values throughout the day oex was the largest pit when they started,oex is like the spy,it's a 100 stock index
of course i've heard of timberhill http://www.interactivebrokers.com/en/general/about/about.php Interactive Brokers Inc. (now known as IB LLC) is incorporated as a US broker-dealer, making Timber Hill's vast intercontinental electronic network and trade execution services available to customers