My first trade Long Put CSCO at $27.50 strike with 9 days to expiration. I was up over $100 the second day but chose to hold. I intend to make these gambles when I have a hunch things will go my way. THe way things are the market seems primed for a big pull back if bad news sours the mood. CSCO is 31 days out to earnings report so no real reason for it to push up. Total Probability of profit is 30% according to the dough platform. This is a calculation I would like to get more familiar with on a gut level. I don't waste my time on greeks. The strategy is basically a trend strategy with the options leverage. Gain or lose I will roll out to the next expiry and try to pick my entry point as close to around 15 dte to keep my costs down. My goal for 2016 is to break through $10k balance starting with $2500.
Xerox +10 Puts 27 dte @ 10 strike. Earnings tomorrow. Positive expectations for the report which I found out after the buy. Dough gives it a 10% probability of profit. Looking to collect credit on the next strike up if things go bad or wait it out for a possible profit if broader market forces a move.
Closed for $347 net. Such a dart throw trade but I think I made logical steps getting into the trade. It was a cheap bet I was not bothered with losing. Earnings report coming out in a season during which the tech sector has not posted anything spectacular. On top of all it all is a broader market that whipsawed violently down and up in a short time and is pushing against resistance put up by its own vague motivations. I took a small risk and I gained.
Covered my shorts and went long for $280 net. I think CSCO will push up to new highs before earnings on may 18. If underlying keeps moving against me I will short near strikes to try and minimize losses and ride it out and/or load up on cheap options near expiration to try and catch a big move. The stock was not tracking with the broader market today, staying negative while the indexes went green. I shall see if this is a clue I should have paid good attention to.
CSCO got ugly. I just found out I cannot mentally handle shorting options. It just grates on me far more so when things go bad. The trade was a badly planned trade from the start. Jumped on LC and SMTC.
Closed all trades today. Some of my previous trades could have paid more had I stayed longer. My mind was tethered down to my small account and I could not see the possibilities given how everything lined up. My new goal: PROJECT $50k+ in year 2016. Withdrew $600. Balance $4297