$AAPL another leg up coming here..

Posted @ 580.10

Sure bud, glad I could help!

I'd just like to add to Aznboi's posts that identifying support and resistance in 1, 3 and 15 minute charts is also important for intraday trading. Just my 2 cents. Also Stoch RSI is important.

Well done Weaver, nice trading and I'm glad to help. Have a good weekend.

Yessir, finally getting myself a winner here it seems. I'll probably unload them relatively soon if the market starts looking shaky. Might even end up breaking even for the week if I can get this sold around .30

Thanks for the kind words Ivan, I enjoy helping others in understanding how this all works because when I was first starting out I had to do a ton of research to understand the different variables in options trading. I'm glad you find that some of my advice helps (hopefully you didnt follow too many of my trades this week though!) : P

This is a difficult question to answer but let me start off by saying that for people new to options the few (imo) appropriate times to hold options overnight would be if you are playing what is called a "lotto" around here. That would mean buying a far OTM (out of the money) option which you plan on letting ride out for a potential 500%+ gain, but you would be ok if it expired worthless. Obviously the goal on these is to be correct more than 1 out of 5 times. If you can do that, you will be successful at them.

Aside from that, holding overnight is a personal preference which depends on how strongly you feel about the timing of the move, what your goals are (if you have a significant position you probably shouldn't hold overnight), and what you've set your target selling price at. These are all questions you'll have to ask yourself on each trade BUT I would say that for new players, holding options expiring within a couple days overnight is not a good strategy until you get the hang of things.

As for your other question, when the new weekly options come out Thursday, you'll see many here, including myself, playing them. There are a few reasons for this:

First, you are able to establish a position before implied volatility increases by an increase in buying volume for the option you'd like to trade.

Second, it is a nice middle position between a weekly expiring in a day, and a monthly expiring, let's say, 20 days down the line. Really it is up to your trading style, amount of leveraged wanted, amount of time value premium you'd like to pay, and what your time frame is for the expected move of the stock price.

Some people, myself included, will play both the current weeklies and the new weeklies for the same or similar positions because it gives you more leeway. This is considered rolling one position into another.

Hopefully this helps, I wouldn't say any particular play is "off limits" from a stategic standpoint, but as a new player, beware of the pitfalls of holding soon-expiring options overnight, or over the weekend, unless you have a logical and fundamental/technical reason for doing so.

Feel free to ask any more questions.

Yep. I mean if you feel comfortable taking a 150% gain on either one of them (which could very likely happen). I don't know, up to you in the end!

Go for the puts!

Welcome, don't be afraid to ask questions and good luck!

Could make a reasonable straddle imo. If you can get in cheap on both and expect a big move one way or the other there's $ to be made.

Alright fine, you guys can get me to come out and play. In $AAPL w 585 calls @ .11 for the lott-o-weeeeeeee

No problem bud, feel free to ask questions here and welcome to the board.

Nice one sam!

"Another scenario, I hope until expiration...same thing is going to happen correct? lets say I hold the option until it expires in July. I will then buy 100 shares at 40, etc? Or will I make the 4k then?"

If you hold it until it expires in July, then if it is ITM (or IN the money, which means that it would be trading above $40 since that is the strike price you chose), it would be automatically exercised. You can certainly do this if you would like to own 100 shares of SODA after July, or at any time before that you can trade out of it. Keep in mind that if SODA theoretically stays at 40.50 until July expiration, or just ends up closing at that price on the expiration date of your contract even after moving significantly in between now and that date, your option will only be worth .50 (or $50) per contract (down .30 from your original purchase of .80) because of time decay. If you'd like to learn about time decay I suggest googling it, and reading up on articles at 1option.com and optiontradingpedia.com to get you started.

The only way for you to make $4k on this one contract would be for the option price to move from .80 to 40.80 (this is because if a stock option is priced at $40.80, you're getting back $4,080 for one contract, which is what you own in this case, and subtracting that from $80, which is what you paid for the one contract originally). This is unlikely because it would take a sharp increase in $SODA's share price in a short time period.

Overall just understand that options are a leveraged vehicle which contain time factors, premiums, and decay. Read up on those websites thoroughly and you'll get the hang of it in no time.

Hope this helps.

No, what you are missing is this:

You only bought one contract which entitled you to buy 100 shares of the stock at $40. The stock is currently trading at $40.50. So, if you were to exercise your profit would look like this:

Buy 100 shares of SODA @ $40 for a total of $4,000

then lets say you immediately sell into market...

Sell 100 shares of SODA @ $40.50 for a total of $4,050

That is a profit of $50. Don't forget that you also paid $.80 x 100 shares for 1 contract for the RIGHT to buy the stock at the strike price. So, you paid $80.

Now you've LOST $30 on the trade, plus commissions which will likely equal $20 or more. The reason why? Because you gave up the time value, since the longer out the expiration date is, the higher the time value, or premium you pay to give you some time leeway.

So, if you trade out of the 1 contract right now, you would make more because you get time value from the trade too.

If you trade out now, you would make $120 because you bought 1 contract at .80 for a total of $80, and can sell it at $2.00 for a profit of $120 minus fees.

Hope this clears things up. You almost NEVER want to exercise options, just trade out.

If it is before the expiration date, you are almost always better off closing it with an offsetting transaction rather than exercising it. When you exercise an option, you give up any extrinsic value it may have. Only the intrinsic value will be realized – any time value remaining is lost. In fact, according to the OCC, only 10% of options are exercised, 60% are traded out, and 30% expire worthless.

You should trade out of the option if you want to lock in profits by "selling to close" if you bought the option, or "buying to close" if you originally sold the option. In your case, trading out of the option right now by "selling to close" would net you a minimum of $110 per option contract. This is assuming you bought 1 contract at .80, and it is now trading (as of this post) at 1.90 x 2.10. Also note that you can place your sell price in between the bid and ask spread to squeeze out more profit (for instance, you could sell your option in the above example at $1.95 or $2.00.

Also, you do not need to wait until the stock hits the strike price in order to exit the option trade, you can do this at ANY time. Hope this helps.

Someone just opened a large debit spread on the $SPY 135 w p and 136 w call. Just a heads up that someone is betting pretty large that we'll stay between 135 and 136 for the rest of the day.

Nice one bud! I'm on the sideline today but nice to see you guys making some cash!

Well, got my ass kicked this week for those keeping track. It is important to admit defeats, learn from them (though it was hard to see this news coming obviously), and post them. Almost as important as gloating about successes! :D

$SPY 129 w puts - Sold 1/4 yesterday @ .13 from .295 average, other 3/4 will be dead.

$VXX 17 w calls avg @ .155 will likely be dead

$CRM 120 6-Jul w puts in @ .34, will average down

$SLV puts going to be dead as well I think.

Had a few small winners and scalps along the way like $ZNGA and a few $SPY scalps here and there to ease the loss, but it was a poor week overall.

Next week should be better. Going to stay clear today and keep cash now that we have rallied so much P/M. Good luck!

$SPY broke through 135. Now 135.25

Consumer spending lost less than 0.1% in May. Markets will continue rallying.

Seems rational, which means it will fail. Haha :)

$AAPL calls today anyone? Window dressing, earnings runup, and it hasn't moved much.

Don't forget the markets close early July 3rd and are closed July 4th. Short week next week.

BREAKING NEWS: Futures up over 1% after Euro Zone Agrees on Bank Supervision, Bond Support

http://www.cnbc.com/id/48007337

Wow...

Tomorrow is going to be interesting. Stay focused!

Great call on $RIMM Mikey.

What a fall from grace at $NKE over the last couple weeks. Was trading at $110 on the 11th of June.

Voodoo market, unbelievable.

Well..may have to hold these unexpectedly. WOW.

Ha

Averaging down $VXX w 17 calls @ .13

Avg is .155 now.

Really surprised this hasnt bounced going into EOD already..

In $VXX 17 w calls @ .18

Indeed. Good play though! Nice recovery

Buyers will come in soon imo. It could dip to around $9.50 tomorrow maximum imo. Not much more room to the downside.

Ughhh, kiss of death. Sorry guys.

Haha, indeed.

I think it settles around $10. Will likely stabilize tomorrow and get a small bounce back to $10.50 area.

Big leg down coming for the market. You can feel the pressure.