MARY4MONEY
806 posts
msg #80867
- Ignore MARY4MONEY
modified |
10/9/2009 9:48:50 AM
what you look for is a stock that is rising before earnings with good put and call volume-above its 30 day average volume--you want to find ones way overpriced--if we look at fdo from this week--it was moving up steadily until earnings- which were in ah-- you want to buys these within 30 minutes of the close whether its in ah or the next morning in the am-- at about 300pm you check the next call above the stock and put below the stock-- so stock was at 28.40-- the 30 calls for oct was at 0.80 and the 25 put was at 0.30(you also want to do it on stocks that dont move much on earnings- you can go to option slam.com to find this out for the last 4 earnings free)-- to find out whether the option is over priced- you go to--- Schaeffer's research.com--go to the option center and scroll all the way down to near the bottom and click on--•Option Pricing Calculator--which is under tools on the left hand side--just put in the stock-stock price- option and its price and click calculate--Company Ticker: Stock Price Expiration Month Expiration Year Strike Level Option Type Bid Or Ask Price Of Option --Select One-- January February March April May June July August September October November December 2009 2010 2011 2012 Call Put -- any way the actual price of the fdo 30 call was 0.80 -but the calculated black scholes price was only 0.20 and for the 25 put the actual price was 0.30 but the calculatee price was only 0.02- so they were very overpriced--(you can do this any time for any option your interested in trading- you will see why i trade bac options because many times they are way underpriced)-- so in ah fdo had good earnings and goes as high at 29.70 the next morning the 30 calls open at 0.60 even though the stock is up 1.20$-- the 25 puts are 0.05- so you cover those for an 80% profit- and wait on the calls to cover-the stock eventually go back to 28.40 asgain and now the calls today are worth 0.10 for an 88% gain-- i did the same thing on aa a few days ago- it closed near 14.20-- the 15 calls were 0.40 but their value was 0.18 and the 12.5 puts were 0.15 but their value was 0.03-- the next day aa was at 15.0$ and the 25 puts were at 0.02 so i covered them- at yesteredays close the 15 calls were at 0.16(they only danger of this play is that you could lose a lot of money if the stock really took off(but if the stock is near its daily rsi-2 high right before earnings-you have about a 98% chance of winning--you also have to have a margin account with 10 times more money in you account than what the option play costs--here is my play on the 12.5 puts on aa---Trade Date Order Type Symbol QTY Price Commission Amount Post
10/8/2009
10:06 AM MARKET - COVER TRADE AA VA 700 $0.02 ($1,400.00)
10/7/2009
11:39 AM MARKET - SHORT TRADE AA VA -700 $0.15 $10,500.00
so i made a profit of 9100$ on a 10500$ short position on a put-------Trade Date Order Type Symbol QTY Price Commission Amount Post
10/9/2009
9:32 AM MARKET - COVER TRADE AA JC 721 $0.11 ($7931.00)
10/7/2009
11:37 AM MARKET - SHORT TRADE AA JC -721 $0.38 $27,398.00
giving me a neat gain of >19000$ in 2 days-- the best time to do this is the last 2 weeks of expiration-
|
the_trade123
107 posts
msg #80886
- Ignore the_trade123 |
10/9/2009 12:03:56 PM
M4M which trading website do you use for this? Could you please let us know? many thanks!
|
MARY4MONEY
806 posts
msg #80927
- Ignore MARY4MONEY |
10/9/2009 4:22:10 PM
http://www.schaeffersresearch.com/streetools/options/calculator.aspx
|
MARY4MONEY
806 posts
msg #80928
- Ignore MARY4MONEY |
10/9/2009 4:24:03 PM
Option Pain (Max-Pain) Calculator
New Current PainTM Chart
Current Pain is the next generation option expiration estimator -- derived only from options sold since last option expiration. Compared to Option Pain, Current Pain is a more accurate proxy for the stock manipulator's price target on option expiration dates
http://www.optionpain.com/MaxPain/Max-Pain.php
|
the_trade123
107 posts
msg #80934
- Ignore the_trade123 |
10/9/2009 10:24:02 PM
M4M, I meant which trading webiste as in "where you actually buy and sell" that you use? Thanks
|
alf44
2,025 posts
msg #80935
- Ignore alf44 |
10/9/2009 10:39:52 PM
...isn't M4M a "paper trader" ?
I always assumed he/she was.
Did I miss something ???
|
the_trade123
107 posts
msg #80946
- Ignore the_trade123 |
10/10/2009 11:22:47 AM
Is that right? I thought M4M had some real time practice along with all his lessons....the ideas are good indeed, but if not practiced in reality these are very difficult to crack as such.
The reason I asked was because the requirements for short selling options are really stringent as it is very risky.
|
alf44
2,025 posts
msg #80947
- Ignore alf44
modified |
10/10/2009 11:50:40 AM
...for the "average Joe"...writing NAKED Puts and Calls is a near impossibility with any Broker I am aware of !
-----
M4M lives (and trades) in a fantasy world ! imo
Regards,
alf44
|
gejordan
22 posts
msg #80955
- Ignore gejordan |
10/10/2009 9:46:12 PM
M4M plays a trading game on some website mentioned in a post a few weeks ago. This is where all of the trades are being placed... they aren't for real money.
|