I saw from a previous post that you made a purchase of MSFT FEB calls and made a nice profit. Was there any specific catalyst that you used to make that trade? Do you follow any set of rules or criteria?
Nope. I really want to develop rules or systems. That's my goal. And I am trying to study technical analysis. For the MS Feb call, it is just a directional bet with my bullish view on MS. The directional bets are risky, that's why I am only breakeven at this moment. I lost money on several other banks. Very rudimentary so far.
I have traded single stock and options for the past few years very sporatically. Mainly just studying the market movements from a distance. Currently, I have developed a tools that tracks the momentum of option prices and have had some success. But my trouble seems to be in the exit, not entering the position. For example, I bought FCX 20 Jan calls on Dec 22nd @ .22 and sold them for @ .60 a couple weeks later. The price eventually went over 2.00 a couple days later. A couple other trade I put on that day ended up breakeven because they went down in value considerablely and I put stop at breakeven. They eventually went up as well.
Check out the Options Lab at http://optionslab.appspot.com it will help you analyze your options strategy and positions.
Hello pengw, Since Options Lab is YOUR site, why not tell us more about it? Which variables does it allow us to change? Date? Stock price? Implied volatility? Skew? What does it do especially well? Must one register to use it? Just a brief idea would help. Mark
Mark, Please see my response below: >Since Options Lab is YOUR site, why not tell us more about it? The Options Lab supports dynamic charting for most common used options strategies. The Options Lab tries to make sure everything you ever need about a options strategy in ONE screen, all within a few clicks away. >Which variables does it allow us to change? Date? Stock price? Implied volatility? Skew? The IV, greeks, underlying, date and quick loss/gain analysis, +/- 30% analysis >What does it do especially well? When you are online, click on the Online tab, then enter a ticker such as "rimm", then the Options Lab will do everything for you. Choose any strategy on the left hand side. you sill see everything on the right hand side changes. It will supports up to four legs, plus underlying. The days to expirations are shown on the top, update 10 14 months from now. >Must one register to use it? It will requre registration later on. Thanks
The only advice I can offer when you're long is to be extremely rational and business-like in your entry and exit points. You'll never know if it'll go higher, and if it does, before your long position expires. Define what return you want, once it reaches your target, get out. Greed will wipe away your gains, since there is no limit to how high things can go in our minds. I've seen it happen to someone close, which is why I'm personally okay taking what I initially wanted. If I get into that mental pit, I'll lose in the long run. People are up in casinos all the time, most leave with less than they came. The hardest part is cashing out.
More instructions: To use the options lab, if you are online, just click on the online tab, then enter a ticket such as 'rimm' or 'qqqq', then the Lab will do everythng for you. You can choose any strategies on the left hand side, the right side will reflect what you just selected. try to change dates and IVs and stock prices to see how the position play out, hit exp to see how the position looks like at the expiration date. hit hit quick gain to see what the gain will be if everything goes to your way once you place your order hit quick loss to see what the loss will be if everything goes against your way once you place your order hit shift -a ( A) to see what gain/loss if underlying goes up or down from 0 to +/- 40% Modify the upper right sections to design your options strategy Hit lower right corner to get instructions. From entering the ticker to get what you want should not be more than 3 clicks away. All in one screen.