False BOs

Discussion in 'Trading' started by antincedo, Oct 17, 2008.

  1. for the love of BOs today is chalk full of false ones!!

    what to do? when u keep getting taken out by these things...
  2. dsq


    stop trading...today is tempting to short but the market right now looks like it wants to melt up huge...u you can scalp for 10-15 cents on stocks and thats not worth it to me...
  3. Option expiration days can have more "choppiness". As the market goes near one option strike price after another, traders get "excited" about doing trades (ATM) at-the-money. :cool:
  4. Options expirations have been pretty "quiet" over the past several years, but this one is one of the craziest VOL expy days I have seen in recent memory . . . The VOL in the coal stocks is insane!

    Check out BTU today on a 1-minute chart.
  5. so you guys believe this is because of option expiration... if so

    what days do options expire so i can figure this into my strategy?
  6. You must be very NEW to this game.
    Options expiration for equities and equity-indexes are the 3rd Friday of each month.
  7. I'm very new as well, learning something everyday. So how do you alter your strategy on options expiry days?
  8. Well, a lot of the "unwinding" of stock and stock-options positions tends to happen the day before options expiration, as well as ON options expiration.

    It can be a highly VOLATILE time period of roughly 48 hours . . . best to lower your trading "size" in order to deal with the VOLATILITY of the moves.

    No real reason to get yourself all "chopped" up on it.

    Stay "small" in your trading size leading up to expiration, and on expiration.

    Next week, the market should give us a better picture. Big earnings announcement week next week. Should be interesting to see how the market REACTS to the news.

    Remember, it isn't necessarily the "news" that is all that important.
    It's HOW the market REACTS to the news!

    For example, if the market ( or a stock ) can rally on "bad" news, that is BULLISH.

    Best of Luck.