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Boring Income Option Trades
There are many, this is one setup, the 30 day calendar play.
Typically, you buy a calendar as opposed to selling one as we in a bull market. How it works: Sell the front month calls, and buy the back month calls. Get in 30 to 35 days prior to front month expiration, try and get in on a Friday, better if it's an up day on the indexes. IV should be in the bottom 1/3 looking at it on a daily, going back a year or so to get a gauge of where you are in terms of IV. Use index ETFs. The diff between front month and back month IV should be less than 2% ideally. Why it works: The decay on the front month you sell is more rapid than the back month you buy. This is how you get paid, selling time decay. Why index ETFs, because unlike equities, indexes are not volatile to news, downgrades, etc. The target is 15 to 20% in 10 trade days or less. Analyze the trade before putting it on, it should be relatively delta neutral, and positive theta. The delta and theta will vary depending upon the number of contracts you go with. The idea is theta will grow daily, this is your check you get each day, and theta should increase each day until your target is hit, then it's time to exit. This is a DIA 153 calendar, up 11% in five or six days, even with the big surge Weds. The trade can be adjusted if it goes against you early on. Max loss is defined, as is max profit. These are high probability trades, putting the math on your side, decay is your friend. Price can move quite a bit up or down, you still win.
Cheers
Making Gains & Cutting Losses
Putting this out there because for years I didn't know it.
I'm likely the only one who didn't, wonder what else I still don't know?? lol
When you buy at the ask you're getting ganked, and making profit is that much harder. In ToS, and possibly other platforms, you can choose to display the theoretical price to buy and sell, it's aprox in the middle of the B/A spread. Buying and selling around the theo can be the diff between a winner and a loser, particularly when scalping. Of course you may put in your bid at or under the current bid and wait it out, but on a scalp, trading a breakout, or what is believed will quickly be a breakout, ya don't want to miss the play and no chasing is allowed in my trade plan. For a breakout scalp, bid the theo price, may have to bump it a few pennies sometimes, but it always fills pretty quick. On the sell side, if ya want out quick, use theo price and drop ask a few pennies. If your platform doesn't display theo price, use a number mid way between the B/A to buy and sell. This is only for scalping breakouts. It doesn't apply for trades there is no hurry on. Never forget, Goodies are the best lookin traders lol.
Weeeeeeeeeeee
Cheers
MCP Setting up to Break
5 min squeeze began late yest, 15 min sq now, momo is upward.
Squeeze Trade Setup
Under price action chart, the 12 period momentum indicator,
look for this to be rising and preferably above the zero line
at entry point. Under the momo indy box is the squeeze indicator.
The squeeze comes when the keltner channel moves inside the bollinger bands, signified by the red dots. Under the squeeze box is the A wave indicator, short term momentum. On the bottom is the C wave momentum indicator. The A wave isn't as important as the C wave. On the C wave, when the dark blue vertical lines change to light blue this shows a shift in longer term momentum.
The safe play is to wait for red dots to turn green signifying the keltner channel is widening and has moved out of the bollinger bands. Pinned up energy is going to be released one direction or another. I use the 12 period momentum to provide the clue on direction. Once the squeeze is released, the green dots, it typically lasts 8 to 10 bars, an exit made when the light blue vertical lines on top of the green dots changes to dark blue for two bars. On the 5 min, the breakout can be longer than 8 to 10 bars. In the last ten min of the cash session, the TICK rolled over to the downside, and that roll actually began in the final 15 min, which can be clearly seen using an 8 & 21 EMA placed on the TICK 5 min chart. The same EMA's on the VOLSPD 5 min chart rolled over at the same time, which is typical.
PCLN 15 min & 5 min chart, for scalp trades.
PCLN 2nd Scalp In & Out
This time delta high 20's next Fri exp.
Looking for .50 cents in this one and got it.
Even though I think PCLN is going to give up more yet today.
The 1020 Call in @ 4.90 n Out @ 5.40
Not a homerun. But I'm not a homerun hitter.
Goodies are the best lookin traders, I always say.
Cheers
PCLN In & Out
Went in just a bit early, 965 call, next Fri exp.
This was a quick scalp idea only, no homerun.
In @ 29.80 / out @ 33.60
Will hit it again if it look right.
Cheers
PCLN Trade Setting Up
A bit early to tell but bullish is the expectation.
Waiting on confirmation. If it does confirm north,
965 call next week exp is my play.
Cheers
MCP Trade
She's in a weekly squeeze here with 12 period momentum moving north,
with a quick snap back down just for this week. I'm gonna keep an eye on it for a 5 min, 15 min, or 30 min squeeze to set up and if momo is northbound, jump in from there. I do expect metals & commodities to rise here after yest tear winds down. MCP 5 min getting a northbound candle here, crude is leveling off from the pullback. The push back north could begin anytime. IMHO. I do like the MCP daily chart, subtle hint of ascending triangle.
When the weekly squeeze pops and north is the direction, the move can be large, and can last for 8 to 10 weeks.
Go bulls!
Cheers
NOC Trade Finished
We hit the first target, and this morning we came within 7 cents of 2nd target. If your theta is .07 or greater, there is no reason to hold out for target 2. Yest move and a brief opening addition to that this morn was a fluke, a bonus on time.
Certainly the trade could continue to move up over the coming days or weeks. But in this trade setup, we have targets and take profit
when targets are hit, and or if the math says your going to pay to hold, more or equal to the amount you're short from the target when the target is very near.
Cheers
SRE Trade Triggered
SRE trade trigger on crossing and closing over the 78.6 retrace alarm went off yest after fed news. I expect it to go down for a day or three returning to a slower steadier upward progression.
So I didn't enter here yet. It may fall back under the 78.6 and if so, alarm will be reset for calmer move back north.
Cheers
Yest GOOG Scalp
I don't typically play low delta weeklies but yest GOOG had a 5 min cup n handle, and a 15 min & 30 min squeeze with 12 period momentum
pushing north suggesting an upside move was about to come. Picked the 895 call @ 2.85, filled seconds before fed news. Bailed at 7.60,
but the call closed in the 9.00's, and hit in the 10.'s early before falling this morning. It moved from a delta 20 to a delta 75 late yest. The big move was pure luck as I was only looking for .30 to .40 cents over an hour or less.
Yest move crushed an Oct/Nov calendar spread I picked up last Fri.
But I anticipate a reversion to the means here, and tomorrow will make an adjustment on the calendar to pull current pricing back into the center of the profit tent. The TICK has been trending down all morning, VOLSPD and ADNDD are flat and or falling.
Cheers
Fed: No Taper / Economy Not Strong Enough
The +1000 TICK Alarm is ringing on nearly every five min candle.
It's a good time to have been in bullish positions.
I hit GOOG 895 calls @ 2.85, filled moments before announcement.
The 5 min had a little cup and handle goin on.
And there was a 15 min and 30 min squeeze with momo rising.
Weeeeeeeeee
CF Progress Update
Monday CF crossed and closed above the 78.6 entry trigger for this trade setup. With the 1st target being nine bucks away, almost 5% on a 200 stock, we need to see where possible OHR will get in the way. If we stand a chance at striking the 1st target we have to push and close on top of this OHR projection cluster. Even if we do, there is one more projection R in front of the 1st target.
Beyond that if we make it, we have strong R at a 61.8 larger move fib retrace @ 208.94 to get through on the way to target 2 @ 214.77.
If we do make the first target, target 2 is going to be tough IMHO.
Unlike playing this setup based on new 52 week highs, then trading the setup on a pullback, the probability for target strike on this
doesn't fit the 80% repetition setup. I missed that little detail on the front end of this alert. lol weeeeeeeeee
Cheers
Knowing When To Bail Out
Often times we must know when to cut our pain and bail on a position. They can't all be winners. Got in USO when it looked like we were going to strike back at chem weapons abusers. When this news was first broadcast we had a quick sharp decline in broad markets, the TICK alarm was ringing at the -1000 level as money was pulling out fast. But, watching crude at the same time, it caught a bid and move up in sync with the market decline, suggesting a trade op was in the making. I jumped in quickly, bought some time on this position. Crude was already slowly working it's way north prior to this and I caught the last move in early July for some nice green.
The geopolitical chatter soon became quiet, which is good, crude move lower. Moved under my entry, and kept going lower. But before the geopolitical events, crude was poised to move up, but I had to know where to draw the line on holding. Running fib projections yest afternoon gave me the info. As I'm posting this, crude is moving higher.
Cheers
Wowza That Was Fast
Repeating Trade Setup Review
The outfit who taught me this trade setup say it is an 80% probability of panning out. That's better odds than selling credit spreads one standard deviation out. Sometimes this setup gives the pay day quickly, sometimes it takes a bit longer. Give yourself time
on the option for this setup. There is a time and place for low priced OTM options but this isn't one of them. Try and give yourself 30 days min, and buy a delta in the low 70s. When the uptrend is strong, I'll go deep ITM and buy deltas in the high 90's as there is very little premium on these, as long as price doesn't collapse, the intrinsic value of high 90's deltas means your option
will hold value, theta is very low on these. If you use stops, place them not far under 78.6 entry trigger, you define the risk you can tolerate. I like to set an alarm to ring on every ticker I identify for this setup, alarm trigger at the 78.6 price point.
Here is NOC 4 Hr Chart.
Cheers
CSTE Daily Squeeze Trade Setup
Image hosting site is down here.
It's about ten dots into a daily squeeze.
Fib timing event cluster @ 9-16 thru 9-18
Alarm is set at 43.44 on the 78.6 forward extension.
If we cross that I'm looking for 1st target 127.2 Ext = 46.30
2nd target = 48.36, this 2nd target sits together with another
127.2 extension. OHR is in front of 1st and 2nd target @ 45.41
Cheers
CF Hit My 78.6 Extension alarm
Of 199.52
1st target is the 127.2 @ 208.43
2nd Target @ 214.77
Somehow I lost my fib work on this.
But the alarm wasn't lost.
NOC Extendng to the 127% Extension Here
HOD today, 97.61, 2 cents short of the 127% extension.
2nd target if we plow thru the above is the 161.8 @ 99.17
Cheers
BIDU: Breaking It Down To Smaller Time Scale
To remain in an uptrend, we need higher highs and higher lows.
Until this cycle is broken, BIDU remains in an uptrend. BIDU
broke out of the daily squeeze Weds, it's 3 days into the breakout
which typically lasts 8 to 10 bars. But we need an entry trigger,
everyone has their own triggers, I use an 8 & 34 EMA crossover.
It would come on a 5 min before it comes on a 15 min, but the ultra short time frame can be a head fake. Applying the same fib work to a shorter time frame can provide support and R levels we don't see on the daily. BIDU broke out of the weekly downtrend, stretched it's legs, consolidated, and is possibly going to continue up now,
unless it doesn't lol. On the weekly, we see a descending wedge with the breakout in mid July. There is a thick fib cluster of OHR between 148 & 150. We not make it through this area. Need to
work on displaying the chart larger. Sorry about that.
Here is the 15 min chart:
NFLX Scalp On Squeeze Setup
Watching NFLX on 30 min, 15 min, & 5 min, there was a 30 min squeeze with upward momentum, a 15 min squeeze had fired long already, and the five min squeeze with upward momentum.
Jumped it quick for the 295 delta 70's monthly exp in a week.
Bid at theo price, never pay the ask, 12.05 took a min or two to fill. On the quick scalp I do take the bid price to exit fast, was 2.85 but a tad more upside looked to be coming. Sold at 12.90
No homerun, more like a bunt and run hard for 1st base & the ump
had to make the call. Said I was safe, got up and brushed off my pants, 1st baseman talking smack. Thanks Manic for a heads up.
Cheers
Muchos Gracias Mr C
Trade Setup: The Squeeze on NOC
Lots of folks use different indicators and call a setup a pincher or a squeeze. I use an indicator which is trademarked, The Squeeze, found on the ToS platform. I add the wave twice, and change parameters on each to create an A Wave and a C wave. Then I use custom script written into my scanner, the scanner linked to my watch lists so I can visually see squeezes for monthly, weekly, daily, 4 hour, 1 hour, 30 min, 15 min and 5 min squeeze set ups in real time. Also use other indicators for a confirmation before putting on a trade.
NOC Daily Chart / Squeeze Example
NOC Hit Scanner Last Night
The set up is a move past the 78.6 retrace on last high to low on daily, = 95.47 and the alarm I set went of right after the opening bell. If it closes above this level we have an 80% probability of going to the 127% extension, 97.63, and possibly then to the 161% extension, 99.17
But there is just not much activity on the options.
I've played these and got paid anyway. Don't know why it's so lonely. Look at the chart lol.
Thanks Mang
I'll take the googies option mod challenge.
Weeeeeeeeeeeeeeeee
Goodies are the best lookin traders lol
FOSL Entry
I missed the initiative. Delta 70 Oct 110 Calls @ 8.10
Moved to 8.60 / I'm not moving my bid again.
Will Cancel and wait.
FOSL Hit My Scan Today Also
Did a chart work up on it. Will post tomorrow AM.
Cheers
USO Targets
The daily chart, from the prior run we consolidated sideways
but never broke below dual fib support, a 38.2 fib retrace and a 100% projection 102.18 & 102.35 respectively. Fib timing projections had a date field 8-20 thru 8-22 where we had a retracement and the next leg up began on 8-22. Next fib timing projection was 8-29, one day after the recent high on 8-28. 9-4 was the next fib timing date, this day saw a big range which fell under fib support of 106.82 yet closed above this level. Now on the move up, if we close above a dual fib retrace and extension 110.33 & 110.49 respectively, we have a 90% probability of moving to 112.80, and if we go through that, 114.55 is my target. Second upside target if we move through the 127% 114.55, is the 161.8 at 117.56
Cheers
SPY Fib Timing Projection
Hit the "bump" on 9-4, fib timing projection date.
The dates only project some kind of event, could be a reversal,
a decent up or down day, etc. Next date grouping is 9-11 thru 9-16.
And, sometimes the fib timing projections don't pan out at all.
Like all fib levels, fib timing only suggests an event may occur.
Hit USO for nice gains last week, in dual positions now in USO
Oct calls, ITM and OTM, both green here. Looking for more upside.
Cheers
Spy View From Here
Pulling multiple Fibs to look for possible support,
SPY sits atop dual fib lines here. But, if symmetry continues,
I have support in a range from 160.71 to 162.14, it's wide yes.
But this area is still above the larger symmetry support down
at 157.63. This number comes from the previous high to low,
projected from last current high 170.97, which I had a symmetry
projected top of 171.25, we missed that by .28 cents.
With no bar count tool in my platform, I use cycle brackets to
get bar counts in regard to symmetry as one tool to predict implied
timing, combined with fib timing projections. The previous low to high to low was aprox 46 bars, and we see that on 6-24 the low had
implied both cycle bracket & four fib timing extensions converge between 6-22 & 6-25. The cycle bracket/fib time extension convergence came between 7-25 thru 8-3, where a top was formed .28 cents under the fib projection number of 171.25. On 8-27 there a dual fib timing projection and minor cycle bracket convergence.
Looking ahead, geopolitics aside, there is a minor cycle bracket and major fib timing convergence between 9-11 thru 9-16, but a bump before this on 9-4 possibly where minor cycle brackets and minor fib timing converge. Not on the chart, looking further ahead, 10-7 thru 10-9 converge with brackets. The bottom line though, only chartists can be wrong, the market is never wrong.
Cheers
Hi LI / New Option Board
What's your definition of a pincher, I'm curious.
I see the term frequently.
TIA
Who Hasn't Done It
Traded on catastrophe that is.
I fondly recall trading penny stocks in the gulf oil spill,
companies to profit from the clean up. That's but one I
recall of several. I was already in USO calls when I saw
the forecast. And amigo, I can tell you there are hundreds
of communities in my state prayin for a solid hit from a
hurricane right now. They are part of existence, always have
been, always will be.
A hurricane is our only hope of filling our aquifers for
hundreds of miles around. If we don't get one, there will
be human suffering, if we get one, there will be human
suffering. Equilibrium.
When the threat of Iran to shut down the straight arrives,
oil traders go long, etc etc etc.
Cheers
Possible Hurricane In The Gulf
As of last night it hadn't shown up on most main stream
sources. Caught it off a forum post, link to a Navy forecast
center. Forecast model had it entering the lower gulf around
the 17th or 18th, an area of circulation coming off of NW South America.
The model shows the affected area would be the western gulf.
There no projection beyond the entry to the gulf well south
of Brownsville, TX.
insert-text-here
Hoping the forecast pans out and we get spike in oil.
Sitting In My Row Boat
And looking backwards, I wish I would have.
Good calls amigo.
Cheers