These options are killing me too. My stop was hit on my CMG puts
today. I will avoid puts until the market shows clear signs of
reversal. This is not a good timing for option puts with the market
still going up. I can hear Steve from here, follow the trend !
I need to work on better setups.
I determined i wanted to know my total risk; when shorting a
stock your risk of loss is unlimited...with my luck ill short a
stock it will split then get taken out 100% above the
price..lol...options can be tricky but when the top looks in place
then the down trend gets broken i thought it prudent to know my
total risk on a play like this...when the stock went under 43 i
thought a $2 downside move looked imminent...well as we all
see...nope..lol...anyway alot can happen in 3 weeks but yes i hear
the ole follow the trend too but this was a short that triggered
and just decided to use puts for leverage as well...
Good to scale out of Options and keep part of your
profit. A bunch of times I have been able to take 1/2
off and the rest is on "the houses" money. And always
remember...that if you have a huge move on an option...you can sell
a short option further down( on a put or further up on a
call) to "cashflow" your option. You limit
your profit if the option keeps moving...but you "lock" in
profits. Pigs get slaughtered...a 1/2 a pie is better
than NO PIE.
I'm not sure I follow all of your message. I understand you sell
half and keep the rest as house money. What do you mean sell a
short option further down? You sell your current options and buy
another set ?
I'm relatively new to options so any strategy that works for
anyone on the blog would be interesting for me as well as any
recommended readings on the subject. I found very good
material how to trade/analyze the market by reading
material from Mike Swanson (wallstreetwindow.com who actually
made me discover BPT) and the continuing newsletters from BPT. I'm
still looking for good readings/ressources for options.
With my recent discovery of freestockcharts.com, I can finally
make my own charts and even set email alerts, this will help me
prepare better setups and triggers.
All I am saying is that if you are long ABC company
of a 50 put at 1.00 and ABC moves to 47.50 you can take
off 1/2 and play with the houses money... or you can sell a short
put against it at lets say 45.00 strike for
1.00 now.... you lock in your "cost"
but limit your profit. It is similar to a
covered call in reverse... A covered
put. To me.. options are not
like stock.. but they are worth money... I like to cash flow
my options if possible once they are
profitable. I usually sell shorts beyond a
support or resistance point if I can get enough money for
them. Hope that makes sense?
Hi Fixdgear, These options are killing
PGN - Stop hit took a wee loss with div...
Posted by atlantis on 6th of Jan 2011 at 07:53 pm
Hi Fixdgear,
These options are killing me too. My stop was hit on my CMG puts today. I will avoid puts until the market shows clear signs of reversal. This is not a good timing for option puts with the market still going up. I can hear Steve from here, follow the trend !
I need to work on better setups.
Atlantis
ATLANTIS
Posted by fixdgear on 6th of Jan 2011 at 10:21 pm
I determined i wanted to know my total risk; when shorting a stock your risk of loss is unlimited...with my luck ill short a stock it will split then get taken out 100% above the price..lol...options can be tricky but when the top looks in place then the down trend gets broken i thought it prudent to know my total risk on a play like this...when the stock went under 43 i thought a $2 downside move looked imminent...well as we all see...nope..lol...anyway alot can happen in 3 weeks but yes i hear the ole follow the trend too but this was a short that triggered and just decided to use puts for leverage as well...
options..
Posted by zach06 on 7th of Jan 2011 at 07:33 am
Good to scale out of Options and keep part of your profit. A bunch of times I have been able to take 1/2 off and the rest is on "the houses" money. And always remember...that if you have a huge move on an option...you can sell a short option further down( on a put or further up on a call) to "cashflow" your option. You limit your profit if the option keeps moving...but you "lock" in profits. Pigs get slaughtered...a 1/2 a pie is better than NO PIE.
Options trading readings
Posted by atlantis on 7th of Jan 2011 at 08:22 am
Hi Zach06 and everyone trading options
I'm not sure I follow all of your message. I understand you sell half and keep the rest as house money. What do you mean sell a short option further down? You sell your current options and buy another set ?
I'm relatively new to options so any strategy that works for anyone on the blog would be interesting for me as well as any recommended readings on the subject. I found very good material how to trade/analyze the market by reading material from Mike Swanson (wallstreetwindow.com who actually made me discover BPT) and the continuing newsletters from BPT. I'm still looking for good readings/ressources for options.
With my recent discovery of freestockcharts.com, I can finally make my own charts and even set email alerts, this will help me prepare better setups and triggers.
Thanks !
Atlantis
Atlantis and Options
Posted by zach06 on 7th of Jan 2011 at 08:42 am
All I am saying is that if you are long ABC company of a 50 put at 1.00 and ABC moves to 47.50 you can take off 1/2 and play with the houses money... or you can sell a short put against it at lets say 45.00 strike for 1.00 now.... you lock in your "cost" but limit your profit. It is similar to a covered call in reverse... A covered put. To me.. options are not like stock.. but they are worth money... I like to cash flow my options if possible once they are profitable. I usually sell shorts beyond a support or resistance point if I can get enough money for them. Hope that makes sense?
PIE..?...THERE'S PIE?
Posted by fixdgear on 7th of Jan 2011 at 07:35 am
any 2 1/2 men t.v. show fans out there?...the kid...lol..