Category Archives: Trading

Updated Deltas on open positions

1620/1625 call spread expiring this Friday

95% probability of success as of today

1630/1635 call spread expiring next Friday

93% probability of success as of today

1635/1640 call spread expiring may 16th

91% probability of success as of today

1645/1640 call spread expiring Friday, 5/24

91% probability of success as of today

Big job report Friday will most definitely affect the deltas on these positions.

20130501-132341.jpg

20130501-132348.jpg

20130501-132354.jpg

20130501-132400.jpg

Apple & RSI

When Apple’s RSI goes to 30 or below….

20130430-092449.jpg

SPX Trade 15

1640/1645 call spread on SPX
.40 gross credit per contract
.11 delta
Expiration: 5/10/2013

I will also post an update on deltas of all of our open positions @ market close tomorrow.

Good luck to all!

20130411-091321.jpg

20130411-091326.jpg

SPX trade 14

New trade!

Expiring may 7th
1620/1625 call spread
.35 credit
.08 delta

20130409-122643.jpg

20130409-122647.jpg

20130409-122653.jpg

Trade 13 GooG

At Sonnysmoney we exclusively focus on the SPX. But sometimes opportunities arise in certain stocks that are too good to pass up.

GOOG has been taking a beating since making all time highs in march.

200 day MA is still rising and currently at $707.

sold -2 695/690 bull put spread
.34 gross credit per contract
$1000 margin being used
.08 Delta
Expiration next Friday

Full 2% below 200 Day MA. 200 day should be above $710 later this week.

Good luck to all!

20130408-105548.jpg

20130408-105553.jpg

Apple swing trades

I usually trade options, sell them – never buy. But current market conditions are not the best for an option seller for a couple of reasons (listed below). Thus my usual strategy of selling options isn’t feasible so I’ve been using swinging trades (briefly discussed in a previous post).

Reason 1 = VIX @ or near all time lows.   This is great for buyers of options since the option premium is cheap and one can purchase options for speculation or as hedging their current positions.

But for option sellers, the option premium currently available is not great and great risk/reward opportunities are hard to come by.  I never force a trade, so right now all we can do is observe price action and look for signs for market direction.

Reason 2 = Lack of clear market direction.  S&P 500 made an intraday high of 1475ish in September.  Right now S&P is at 1410.   Earlier this month, it traded down below 1360.   With the looming “fiscal cliff” on the horizon, it’s not clear what the short term and medium term market direction currently is.  It’s not a good idea to open up new positions as an option seller without a decent idea of market direction be it the upside or downside.

In my previous post I mentioned a short term trading strategy on AAPL called swing trading.  In this strategy I focus on a few criteria:

1.  A stock I would like to own for the future.

2.  A stock that displays great fundamentals for the current fiscal year and its forward PE (“price to earnings”) is trading below the current market’s (S&P 500′s).

3.  Well defined resistance and support established for the stock, at least in the short term.

Over the last two weeks one stock met this criteria:  Apple (AAPL)

1. I would love to own AAPL in the short term/mid term/long term or any term!

2. The trailing PE is around 13 and forward PE is around 10 (that’s dirt cheap!).  This does not account for the $125+ billion in cash Apple has on hand.  S&P 500′s trailing PE is currently at 14.  So AAPL is trading, fundamentally, at a discount than the overall general market.

3.  As I mentioned in my previous post, AAPL has now defined resistance and support areas.   Its resistance is around $594-$596 and strong support around $505.

The figure below shows the trades I made on AAPL.

Image

Using the reasoning I’ve discussed above, I made two quick swing trades on AAPL in one of my IRA accounts. I will try to enter AAPL again around $580 tomorrow and try to sell it around $594 again if it cannot break through resistance.

Apple unable to breakout…

AAPL @ resistanceApple’s 200 day on the daily chart is sitting right around $594-596.

Apple’s historical prices over the last two weeks:

https://mail.google.com/mail/u/0/?ui=2&ik=818a3b69f8&view=att&th=13b1c30288ae7ce2&attid=0.5&disp=inline&safe=1&zw

It tested the resistance around $594-595 today and two other times last week usually right at market open. But its unable to sustain it and has faded into close in all 3 of those sessions.

Worrying sign for the short term, but a great trading opportunity for scalp/swing traders.