Free Stock Options Trading Tips

Broader Market is Up

noreply@blogger.com (Mark Rabjohns) — Mon, 08 Oct 2007 15:13:00 +0000

The Broader Market is up, but no decent trades on the SPY and DIA because the Stop Losses are running too high for my liking. You may like to check individual stocks for Broader Market trades.

GWW as Pre Earnings Trade Candidate

noreply@blogger.com (Mark Rabjohns) — Mon, 08 Oct 2007 15:03:00 +0000

GWW shaped up for a pre earnings trade by crossing the 22pma yesterday. I bought the GWW NOV 90 Call for 6.30 and set a stop loss at 5.20, with a target of 9.60

Potential Investment Trades to the Downside

noreply@blogger.com (Mark Rabjohns) — Sun, 30 Sep 2007 10:00:00 +0000

With Fresh crosses below the 22dma on Friday, LBTYA, AVT and PCAR make good potential investment trades to the downside.

the LBTYA JAN 45 Put is asking 4.80 with a stop loss at 3.90 (a potential 19% loss). The target should be 8.10 (a potential 68% gain).

+++ Update - although not a convincing descent, LBTVA closed below the 22dma in the first hour, and so I placed this trade.

+++ Update - got stopped out at 3.70, so this was a bad trade!

The AVT JAN 40 Put has an ask of 3.40, and the stop loss should be set at 2.80 (a potential 18% loss). The target should be 5.0 for a 47% gain (potentially!).

The PCAR JAN 90 Put is asking 10.10 (a little expensive!) with a stop loss that should be set at 9.30 for a potential 8% loss. The potential gain is 50%, with a target of 15.10.

I will monitor these after the first hour on Monday and see if they have still closed below the 22dma. If so, I will trade.

+++ Update - both AVT and PCAR failed to close under the 22dma after the first hour, and therefor I passed on these trades.

Potential Investment Trades to the Upside

noreply@blogger.com (Mark Rabjohns) — Sun, 30 Sep 2007 09:54:00 +0000

After Friday's close, I could find no attractive potential investment opportunities to the upside for Monday trading. Did anybody else find any?

Short Term Candidate - MS

noreply@blogger.com (Mark Rabjohns) — Sun, 30 Sep 2007 09:02:00 +0000

MS seems to be shaping up for a potential short term trade, as long as it makes a new low after the first hour on Monday. It crossed below the 50dma on Friday, and there is no lower resistance point, so it could make a six month low of 54.90. It is currently trading at 63.

The MS NOV 65 PUT is asking 4.10, with a stop loss at 3.20 (or a potential loss of 22%). The target is 10.0 (or a potential gain of 143%).

I will watch this one on Monday and trade if it makes a new low after the first hour.

+++ update - MS failed to make a new low after the first hour, so no trade.

RIMM Pre Earnings Trade .... Not!

noreply@blogger.com (Mark Rabjohns) — Sun, 30 Sep 2007 08:23:00 +0000

I liked RIMM for a pre earnings trade, since they crossed below the 22pma on the 5 day chart on Friday. However, when I looked at the IV of the RIMM OCT 100 Put it was running at 73.6% - a sure sign that a fall in stock price is already priced in to the option. Definately a pass.

I found no other attractive pre earnings trades based on Friday positions.

Broader Market is down

noreply@blogger.com (Mark Rabjohns) — Tue, 25 Sep 2007 08:25:00 +0000

The broader market took a downturn yesterday with the $OEX, $INDU and $COMPQ indexes all dipping below their 22pma.

However, I have assessed the SPY and DIA for potential downside trading, and the stop losses are running too high to make it worthwhile. You may want to check individual stocks for potential broader market trades to the downside though.

TJX makes an interesting investing trade candidate - but used PTV Instead

noreply@blogger.com (Mark Rabjohns) — Mon, 24 Sep 2007 12:39:00 +0000

TJX has crossed below the 22dma on Friday, and the technicals and fundamentals align to indicate a potential trade to the downside on Monday, providing the stock is still below the 22dma after the first hour of trading.

The TJX JAN 35 Put is asking 5.30, with a potential downside of 4.40 (-16%). The target sell stop should be for the stock to make a 10% move from 30.09 to 27.08 to increase the option price to 7.90 for a 49% gain.

++++ update ++++

Well, after the first hour today, TJX shot up above the 22dma again, so no trade there!. However I did decide to make an investing trade on PTV, and bought the PTV FEB 30 Put for 3.40 with a stop loss at 2.75 (-19%) with a sell stop at 5.0 (potential 47% gain)

+++ update - Got stopped out on PTV at 2.55 on 1st October. Oh Well!

KSS and GS setting up for Short Term Trade

noreply@blogger.com (Mark Rabjohns) — Sun, 23 Sep 2007 10:42:00 +0000

It seems that both KSS and GS have set up for a potential short term trade on Monday, as long as they both make a new high after the first hour of trading.

GS is a little expensive, and I will probably virtual trade it. The stock is trading at 209.98 and has crossed its 200dma, and could make a six month high of 230. The GS OCT 200 Call has an Ask of 14.00, with a potential stop loss at 11.00 (-21%). The potential sell stop is 31.00, or a gain of 121%.

++++ update ++++

I ended up virtually trading the GS OCT 210 Call at 9.40, with a stop loss at 7.50 and a target of 21. Unfortunately I got taken out of the trade by a long spike at the bottom of the candle the next day. That is a good lesson not to chase the option because of movement in the first hour!

++++

KSS is more reasonably priced, with the stock trading very near to the 60 strike price at 60.27. It has crossed the 50 dma and heading towards the next resistance level of the 200dma at 69.20. The KSS OCT 60 Call is asking 2.60, with a stop loss at 2.40 (potential -7.6% loss). The sell stop is 9.50, or a 265% gain!. If the first hour goes well, I will trade on this one.

++++ update ++++

NB - As Sally pointed out in her comment, I miscalculated the Stop Loss on KSS -- It should be 1.60 (or a 38% loss potential). Its too steep! - so please pass on this trade if you have not done so already. Thanks Sally!

After Earnings Trade on BBY

noreply@blogger.com (Mark Rabjohns) — Sun, 23 Sep 2007 06:38:00 +0000

On Friday I fancied trying my first after earnings trade, and decided to virtual trade BBY after their earnings announcement on 18th Sept. I noticed that the minimum move in stock price after the last 3 earnings announcements was 10%, and at that point the stock was trading at 46.44.

I bought the BBY DEC 45 Call and Put for a combined premium of 5.75, and have targeted the stock to reach either 51.08 or 41.79 , or before the next earnings announcement, as my exit point.

I will report back on how this one works out, and would be interested in your views on this trade.

Options Trading Tips Introduction

noreply@blogger.com (Mark Rabjohns) — Sat, 22 Sep 2007 07:20:00 +0000

Greetings.

I have decided to start this blog to share my experiences with options trading. I will post potential trade set ups and report back on their results. I attended a class on options trading in July 2007 and have been playing the market now for a couple of months. Options Trading is a great way to get leverage and make better returns than with Stocks.