I have that problem too. My stop losses were too tight resulting in small gains on wins and losses. Does not help the bottom line and just made me miss huge gains! Lesson learned. I have relaxed my stop loss points. Inspired by your earnings plays, I placed a small trade on ANF Jun 15 2018 $25.00 Put and bought 2 put options on 05/31/18 and sold 06/01/18 and got $261.00 profit on $449.00 invested in a one day trade. About 58% return for just 1 day so, I am happy with that. Thank you for sharing. We can help each other by learning from our mistakes.
That's a nice trade. I saw ANF Friday morning taking a big hit. As for trading, the tight stop is what I've fixed over the years. In option trading, I've learned to let my stop be the entire position, especially on earning trades. So when setting up earning trades, I set them up with the intent of a -100% loss. My only advice would be to look for patterns in individual stocks, because those patterns tend to repeat.
Well, this has been one heck of a bull market. I should also mention that the simplest strategies work the best, and history repeats itself. We're all humans after all. I know vanz mentioned it somewhere, but I do look for repeating patterns. Ex. I bought 2 different options in LULU not just for earnings, but also the momentum rally after a strong report. I'm just using what LULU did in Dec 2017 and March 2018. The post earning rally averaged 14% and took about 3 weeks. This is just a pattern I've seen on LULU's chart and we'll know if it works in about 2-3 weeks.
Thanks for the tip. I will certainly, look into that. What I noticed although, it is a limited sample is that stocks about to report earnings seem to give you an inkling where they are headed. The ANF short trade I got into because the stockcharts showed ANF was already tanking the day before the earnings report date which was June 1, 2018. My thinking is people in the know are already dumping the stock so, earnings probably, was bad or not to good.
Well, market is the same to everybody. It was a bull market, but how many people can make this kind of return? No body, probably. I bet you beat the best hedge funds, at least for this period of time. And more importantly, the option strategy and plan you trade, you can easily scale up to millions and billions, you certainly beat those veterans of 20 or 30 years and potentially beat those with billions of funds with a huge team of IT support. You want to sound modest, but your records speak for itself, unless to some who are in denial, but again, that is not your business to be bothered. Just keep doing what you are doing, and I bet your performance will continue, and now you have a much bigger budges to play with, and you are wisely allocating your funds in such ways that you can continue to profit handsomely with calculated risk from your substantial experience in your trading career. As a observer, I just wholeheartedly applaud your performance.
That's true jL575, I guess everyone does have a chance to make profits in this bull market. I'm updating to adjust my stop on PVH. The other positions have gained about $5,000 today, so instead of looking to exit PVH, I want to see how it plays out to June's expiration. These are my current positions: LULU Jul 110 calls at avg 4.267; current price is 14.90 SQ Jul 55 calls at 4.846 (bought on 5/30 and 5/31); current price 6.95 NVDA Jul 255 call at 10.37 and NVDA Aug 260 call at 13.59; current prices 15.80, 18.30 -This one is crazy, bought this on Thursday, and it has done nothing but rallied. I'm looking for a 10% pop above $260 in about 4-6 weeks (about $280-$285 target). AAPL Jul 185 call at 7.966 avg bought on Friday with current price at 10.20. PVH Jun 160 call at 2.85, current price at 1.30 ADSK Jun 135 put at 3.56, current price at 3.00. -Buy high and sell higher is one of my strategies when trading. I bought LULU calls on 5/25, and that was the freaking high before earnings. It sold off for 4 straight days before earnings brought it into record levels. I bought SQ as it started to test the record high at $58. I got into NVDA a little sooner because vanz mentioned sooner. Just did simple research, classic base with support and buying options with NVDA at $254-$255 felt a little early, but it's showing a move now. Same with AAPL, I actually took at loss on AAPL when it started this flag pattern. Here I am at the end of the flag pattern on Friday buying AAPL calls as I look for the $190 break to occur. Today's follow through should suggest that the breakout has some leg. I think we'll see that $1T mark, and right now I just want to be able to say I was with AAPL for its last mile to $1T. I don't have 20 technical tools and look to buy low and sell high. Instead, I'm just buying high and trying to sell higher. The total risk right now is about $46K (including all the unrealized gains/losses) out of $113K. This rally is still on, so hopefully everyone else is making a profit too.
Had the June 15 2018 $250.00 Calls on NVDA @$7.00 and had 2 contracts. Bailed out when I thought it was going down. Big mistake. Now, it is worth $16.50. That is $950 x 2 or $1,900.00 profit I ended up missing on. Ouch!
What you can do is sell 1 while holding the other call with a stop loss. That's what I would do a lot when I'm not sure whether to close out the position or to let it run. By doing that, you won't get that $1900 profit, but you can at least nail half of it in addition to what you already made on the first exit. But NVDA is one of my closest friends (along with NFLX and SQ this year). That was a classic handle shaking out weak bulls on that dip to $240 2 weeks ago. I considered myself buying the options early last week too as I usually wait for the actual break out into new highs like what it did today. In fact, getting into NVDA today's not late at all. The strength is there. I watched the market lose steam after lunch while NVDA didn't give up $264 at all.
Thanks for sharing. I am learning new things from you. Trade management is what I have to work on. I know it will certainly help improve my trading results.
Nothing much today, just adjusting my stop on ADSK. I initially had a 50% stop loss on ADSK, but decided to remove the stop and allow it to run. The initial risk is only 2100 and no more than 1.8% of the account at this point. I'll take the full loss if it occurs, which is the same thing I am doing with PVH. These two positions have less than 2% of total risk each so I'm not risking more than 4% at this point. It looks like I'm a little rusty on my reversal momentum plays, but we'll see how ADSK finishes with the June options.