I have opened a very small account to trade and learn about options. The big picture: when I retire I will cash out lump sum and start a second career as a day trader in stocks and options. I have 10 years left to retirement eligibility so I should l learn much. I started with ~ $825. My intention is to swing basic trade positions in highly liquid options using S/R parameters until I have enough to make more complex trades . My first trade was a really bad entry in INTC. I missed a 7 day run up that started from feb. 5 ,2010 and stalled sideways on feb 17. I thought the sideways action will soon break into a continuance of the previous trend in the following days so I bought 6 call contracts. It seemed as soon as I bought everything tanked. I should have waited for the larger pull back that occured which would have netted me 2x as much as i got in the end. Net gain: ~ $12.-- OUCH! Commissions!! :eek: balance : $837.49
Had I held my previous position, I could have raked in $350+ today!!! I was so sure there would be a downside correction so I closed with intention of getting in at a lower level. The move was as stupid as buying puts on the bullishness in the underlying. Never again. Six calls on the books, again. INTC oct10 $23 @ $1.23 . Earnings in a month. Last earnings report was positive yet the stock pulled back ~$1.50 . What the hell?? Somebody could be up to the same thing this time around, but I will hold firmly.
INTC will hit $22.95 by April 12. I predicted it to touch $22 on march 17 and it happened to the day. Am I some sort of charting genius???! If only had I conviction when I drew the trendlines maybe I could have made something of it. I might just as well take out the gains and seek lower entry when the big correction happens at earnings .
Hi Pennystocker, one thought. If you have a small account, why not just trade the index ETFs (QQQQ, IWM)? If you look at the charts, stocks like INTC track the QQQQ for the most part, strikes trade at $1 increments and the QQQQ is even more liquid than INTC. Plus you get the added bonus of less exposure to news/earnings on a single issue (Unless you are specifically trading for news/earning related events, that is.)