My trades

Discussion in 'Journals' started by optionsinvestor, Nov 14, 2017.

  1. I like $PYPL. Same can be said of $SQ too. I believe both will certainly double from here by the next Thanksgiving. I'd love to see $SQ give me a chance to get in, but that parabolic move is just too much. I'd also love to speculate on the bitcoin side too, especially with $OSTK. I guess I had my chance when $OSTK was at $50.
    #31     Nov 25, 2017
  2. cartmm


    Great thread, OI. I was a bit skeptical given you small account size and the riskiness of your strategy, but I like your approach and appreciate you explanations. Well done! And congratulations on the performance so far!

    Are you actively looking for trades on the short side, or has it just been the situation so far that with a strong 3Q earnings season that you are buying calls?

    May I ask what you think you might do differently if you were better capitalised?
    #32     Nov 26, 2017
  3. Thanks, I got lucky a couple of times already. Like that $WMT trade. I knew how $WMT might react on its earnings, but the rally beyond $93 was not in my expectations. Same can be said with $AMZN. I missed the opening price around $3.11 and was lucky to catch at on the second dip to $5.75. I was just hoping to get $8-10 back on the position by Wednesday next week, but got lucky again with the options now above $11.

    I do look at both sides of the trade. Right now, I'm biased to the long side just because the market is still in a confirmed uptrend. I usually use the new high/new low ratio to give me an indication of potential market reversals. Ex., right now the new high/new low ratio is around 5, and that's high, but I've seen higher with a ratio as high as 8-10 before the market starts to turn.

    It's just harder to short right this moment when the weak sectors are starting to show a bounce at lows. And by weak sectors, I'm looking at oil and retailers. I'll be looking for airlines to start showing weakness soon though so that is where I want to look for shorts. Technology just doesn't seem to break down at all right now. I've only seen breaks, no downtrend at all. Same with banks, and that's expected with interest rates just starting to ramp up and if inflation shows signs of life, then we can see banks start to run.

    As for being more capitalized, I would definitely add to certain positions instead of rolling up to limit risk. A great example is the $WMT trade. Ahead of earnings, I had a plan in set with an initial target (loss is expected to be 100% of risk for these trades). When $WMT rallied past my $93 target, I rolled the position up to remove readjust risk on the trade. Had I been better capitalized, I would have kept the $91 calls in play while also adding the $96 calls. I mean sure I could have just kept everything in play with tight stops, but the risk would have been too high on one position against such a small account. I also played more conservative trades with the smaller account. On a bigger account, I would have liked to play riskier trades like $SQ at $43 and $OSTK at $50-$53 (considering the fact that I would have played at the money options with 1-2 standard deviations at most). I've mentally prepared to make these riskier trades once the account reaches $10K, so hopefully I get a chance to do that soon.
    #33     Nov 26, 2017
    cartmm and vanzandt like this.
  4. I'm definitely going to update my account today. $MU, $AMAT, and $ADI are all showing weakness this morning. The only news I got that might be the reason for this is a downgrade in $WDC. I'm going to go ahead and close out all three today.

    On the upside, $SHOP received an upgrade and is actually on its way back to $120, so that's a nice premarket move. The only one going in my direction seems to be $AMZN, which is now above $1200 in premarket. I will also be adjusting this position by rolling up. The only position I'm not touching today is $QCOM, and I'll leave that one alone to see how this merger will come through in the next couple of weeks.
    #34     Nov 27, 2017
  5. vanzandt


    Shopify updates on Black Friday traffic

    Shopify (NYSE:SHOP) reports that its merchants collectively experienced their highest Black Friday sales to date.
    The company says that more than $1M in sales went through the platform per minute at the peak to top last year’s high of $556K.
    Mobile continued to grow with 66% of orders being made with a phone or tablet, up from 58% in 2016, while desktop sales accounted for the remaining 34%.
    Shopify notes that more than 600K pieces of apparel, 360K accessories, and 210K houseware items were purchased from Shopify merchants in a single day.
    SHOP +0.25% premarket to $112.09.
    #35     Nov 27, 2017
    optionsinvestor likes this.
  6. I played $SHOP on its technical analysis and short interest plays, but that does look like a solid black Friday weekend from $SHOP's merchants. Thanks for the update Vanzandt. I got out of all the trades I wanted to, took a smaller profit in $MU, and losses in $AMAT and $ADI. I was totally wrong in thinking the momentum was still there. I also sold out of the $AMZN calls at $28, and just added $AMZN's Dec week 1 $1220 calls at $9.60. I mentioned that I only wanted to hold the $AMZN position until today, but with the extra profits I'm willing to hold the new position into Friday. Where as I felt $WMT had a top at $100, $AMZN's the leader in online sales, and I feel the sky's the limit on $AMZN. It could stop at $1210 by Friday, it could be $1250 or $1300. There's no telling, and at this point I'm willing to play the risk.

    I guess my view is a bit different from Friday when my account just barely touched above $4,000 where as this morning that $AMZN profit has pushed me up to $5,400 already. I still have a $7,000 target by the end of the year because I'm going to be less aggressive until January.
    #36     Nov 27, 2017
  7. cartmm


    Its true the tech sector had a great run leading into this earnings quarter, but given the results being reported maybe there is a lot of justification. Factset says of the 3Q Results (98% of coys now reported), 89% of tech coys beat on earnings (vs 74% of overall S&P index) and 83% beat on sales (vs 66%). Tech sector earnings beat vs consensus was 11.1% (vs 4.6%) and sales beat was 2.6% (vs 1.0%). Consensus growth for FY18e is up slightly for tech earnings versus 2 months ago, 12.5% now vs 12.4% before, and sales growth is up to 10.0% now vs 8.7% before. Things are trending the right way.

    Here’s some Factset commentary on tech: “The Information Technology sector is reporting the second highest (year-over-year) earnings growth of all eleven sectors at 19.9%. At the industry level, six of the seven industries in this sector are reporting or have reported earnings growth. Five of these six industries are reporting or have reported double-digit earnings growth: Semiconductor & Semiconductor Equipment (47%), Internet Software & Services (18%), Technology Hardware, Storage, & Peripherals (16%), IT Services (14%), and Software (13%). The Semiconductor & Semiconductor Equipment industry is also the largest contributor to earnings growth for the sector. If this industry were excluded, the blended earnings growth rate for the Information Technology sector would fall to 13.6% from 19.9%. This sector is also the largest contributor to earnings growth for the S&P 500. If the Information Technology sector were excluded, the blended earnings growth rate for the remaining ten sectors would fall to 2.9% from 6.3%.”

    I think I share your thoughts on the other sectors you mentioned. I think life will stay tough for many retailers, with Amazon, downward sales pressure and volatility. The energy sector hasn’t moved much despite the strength of the oil price, which has disappointed investors, but not justifiably because the futures curve is worsening. When the headline spot price starts moving back down, the oil players could see a lot of pressure I think. Airlines might do ok out of this scenario if oil get past this short term newsflow, goes lower and stays lower. Financials suffered in 3Q due to the insurance industry, but banks & others were stronger. If insurers were excluded then 3Q earnings growth for the sector goes from -8.3% to 9.6%.
    #37     Nov 27, 2017
    optionsinvestor and vanzandt like this.
  8. Yesterday was a very interesting day. I was tempted to add to the $AMZN position, but my initial cost on the Dec week 1 $1220 calls were going to be my risk. I actually wanted that price as my stop loss on the $1190 call, which is why I had set it up that way. I am not going to touch that position and let it run. If $AMZN falls below $1190, then I'll just close out the position, otherwise I'll watch it run for another day.

    And talk about $SQ and $OSTK. Both stock fell hard yesterday, although that drop in $SQ was the type of trend breaking selloff in record volume. As for $OSTK, I wonder if we get a couple days of selling before the buying pressure picks up again. Volume was just above average, nothing major. It just seemed like weak investors wanted to get out now. There might be a bit more room to run if bitcoin does try to break $10,000.

    I'm also watching 3 earning trades this week in $ADSK, $PVH, and $VMW. Clearly, there's no good entry point in either of them yet, which is why I haven't jumped into any of the trades. Each one will have to be an at the moment trade where I wait until closer to the end of the day and see how traders are positioning themselves. I prefer to take the contrarian play when ever possible.
    #38     Nov 28, 2017
  9. I slacked off yesterday. I closed out trades, rolled up the $AMZN position and then practically went to sleep and missed out on the $ROKU move. Jumped on $ROKU right at the open using Dec week 1 $50 call for a cost of ($487). I believe the short term momentum on $ROKU should be higher by another 15% from $46. I'll look to add a short term play on $OSTK too, but $ROKU is priority.

    **Added more $ROKU Dec week 1 $50 calls for ($292). Basically averaged down on this trade.
    Last edited: Nov 28, 2017
    #39     Nov 28, 2017
  10. I am out of $AMZN this morning. Took a loss on this second position, but I always played this second position as a stop loss to the initial position because of the closing price I got yesterday. I was definitely sweating on the $ROKU move. Added the first $ROKU position at $1.60, and that was too high. I doubled down at $0.95, and it might be paying off right now but I know I'm not out of the woods yet. My target is about $55 for $ROKU, and I expect shares to get at least within $0.75 of that price target by the end of the week.

    The big unexpected drop came from $QCOM. Like I've said, I don't expect $QCOM to be taken out right this moment, but another price increase from $AVGO should push shares above $70 in the short term. That's all I'm looking for, and only reason I held on at these lower prices.
    #40     Nov 28, 2017