Stock option trades

Discussion in 'Journals' started by 4xis2ez, Nov 6, 2003.

  1. 4xis2ez


    I will be recording my stock option trades in this forum. My analysis involves using cycles.
    My cycle work is expecting a stock market drop into the end of November, and then a rally thru December into early January.

    I bought JPM Dec. 37.5 puts today at 1.85. It looks like JPM is rolling over on the daily chart. Hope I'm not to early with this buy. Lets see what happens. Russ. Good trading to everyone.
  2. white17


    Well I'm an option trader but not a chartist. Nevertheless, those lows are getting higher all the time it looks like. Don't think I'd have put that one on. But hey who knows? good luck.
  3. Looks like you might be a little bit early, considering that you are buying options. You didn't mention the expiration month, did you? The premium you paid suggests NOV. These options will expire on the 21st, so you better hope the crash you predicted does not start on the 24th...
  4. I too now think we could be in for a quick drop. There are large swings and people buying into the close, that plus the technicals and sentiment indicators could signal a significant top. Anyway even if you are bullish which I have been until 2 days ago and there is still the chance of a melt up the risk reward now is not very good for longs. I am looking at shorting the Q's , small position because too many have been burned trying to call the top but just in case I am right so I am not watching from the sidelines I thought about NOV or DEC 36 puts or shorting the QQQ futures (3-400shares). What do you think would be the best way to play this ?
  5. white17


    I'm long QQQ leaps and short November calls. Long OEX calls but will close that position today most likely.
  6. good journal..

    will read it, and hope to participate

  7. lindq


    I wish you luck with your trade. However, for the sake of discussion: (1) I question betting on the short side on a major financial in this present market environment. Nov-Jan is, on average, the strongest period of the year, and we are experiencing an extremely strong bull run. (2) JPM is not a stock that experiences a wide trading range. You would need a unusual move in the stock to overcome your spread and decay, and hand you a decent profit for your trouble.

    I do, however, share your thought that we will enjoy a pullback toward the end of the month, and hopefully it will put you in the green on this trade.
  8. What profit/loss/other conditions will take you out of this trade?

  9. play safe and good luck!
  10. Just in case you don't have enough of your own indicators and thoughts to make you uncomfortable and second guess your trade I thought I would offer you some more.

    LOL Just kidding.

    Here is a compressed daily chart of JPM.

    I have read several studies indicating this type of pattern will make the breakout and resume the move in the current direction (in this case up) about 80+ % of the time.

    I agree that on a normal (not compressed) daily chart JPM is breaking down. The trend line shows and daily chart shows potential down to around $35 but I wouldn't get greedy or stuborn on this one. I would much rather enter this put trade up around $38+ with a tight stop.

    Good Luck
    #10     Nov 7, 2003