Wednesday

Some mixed earnings reports and traders withdrawing from the markets pre-holiday have us pinned at another unexciting day. As mentioned on my Monday morning post, don't expect the market to do anything throughout this week. I have slowly started to scale back and out of trades as we approach the holidays and the year end. I am not sure if you are all aware of this or not but I will be going on vacation the week of the 26th and returning on the 2nd. I might need to place someone in charge while I am away. If you'd like to volunteer let me know. I'd hate to fully shut down shop for the entire week.

Anyone thinking about exiting CTRP? As we approach the close, today I am watching RL, PLCM and LAMR (again! Remember this trade from 2-3 weeks ago?). Anyone have any hot ones? MLM and RIMM still moving nicely, and IIG taking a beating!!!

What else is out there?

PS- I have a mental block on what to talk about tonight in Master Talk. I will entertain suggestions if you have any to offer. I'll be back in a few.

Hi Jeff,
Another one that's doing amazing is RBAK. Unfortunately, for some reason I never got into this trade, even though I was watching the stock.

What does everyone think of GVHR? It looks like a nice sym. triangle that broke out, but is the $2.50 move worth it, since it's already moved $.50 and according to the pattern it will take about 3 months?

Geoff

Hey Jeff,

Just yesterday at the 3 day live i learned what factor volatility plays in option pricing - aka buy when volatility is low and avoid buying options when its high. (Do you check volatility often?) I thought this could be a decent topic because I never understood why anyone cared about volatility really. It just seemed like a boring-and-too-complicated-to-be-learned topic. But for us options traders, it seems pretty important?

Not sure. But just throwing it out there.

Good luck Jeff! P.s...the image for today is simply fantastic.

4 months ago you did a class on Volatility BTW your best class. We have a lot of new traders attending the Masters talk you should hit on volatility again.

Danny DR

I exited CTRP at $64. It had made the target and tightened the stop just in time. Love LAMR, thankfully I hung in there.

Sarah

RATE - support bounce
NKE - breakout

Danny DR,

My man that is a great suggestion. I will definitely hit this soon. Emily, I will forward you a few archived articles that you will hopefully fall in love with. They should really reinforce what you've just been fed.

JK

I haven't exited CTRP yet, but I'm definitely tightening my stop. It's up in after hours though. If it opens lower tomorrow, I'm out.

Think or Swim

I attended the advance technicals course in DC today, and heard an introduction to Think or Swim by Tom Sosnoff (one of their former floor traders). It blew me away. While my initial reaction to Think or Swim (before today) was luke warm and I thought it wasn't worth switching, I have changed 180 degrees. This is the coolest and best platform I've seen. It's a no-brainer for me to switch. The tools are off the hook and the comissions are cheaper than OXPS. I want to know more about what these guys do. Just thought I'd share my thoughts since I was initially skeptical.

Geoff,
Sure wish I'd been looking at RBAK and jumped in, but instead I'm into IIG and can't get into my account to dump it.
I agree 100% with your thoughts on GVHR. It's got a gap to fill, but that only takes us up to $24.00 which at this point is only a buck away. Hardly seems worth the effort. I think there are lots of better things out there
ADM puts have been doing really well for me, and with the xmas rally losing steam, I'm thinking of adding to it.
EYE puts are making money right now, too. I'm thinking that over the next month, puts are more likely to make money than calls. I'm only about 50% invested now, and am probably going to cut that back to about 30% and half of that will be puts (at least.)
Chris and Catherine.

To Danny DR....
Danny if you look at Jeff's archives in the right had column, click on 8/13 to 8/20 and you will see the "lesson" on Implied Volitility. Hope this helps!

Jeff,
In you Masters Talk on 12/13 you briefly went over ATR's (Average True Range) as a tool to set up exit points and stop losses. I tried to use it today but didn't understand it enough to make heads or tails of it. Could you cover this in more detail? I think it's a great tool to use. Thanks!

Hello Everyone,

Take a look at MGM. Broke out today on volume. Hopefully LVS and Wynn will follow.

HOG is recovering nicely, and I got into TM (Toyota)a few days ago, and it is making a nice move on news it will be #2 in the US, surpassing Ford.

John M.

I didn't exit CTRP, but i did sell the january $65's against my march $60's. I also have january $100's on MLM that i purchased when the stock was at $93, which i sold the january $110's against this morning.

I have found that after a nice move in the stock, it doesn't hurt to sell calls against the long option position at a point where your target WOULD have been hit anyway. This becomes a win-win, and also helps if the stock fails to reach your target. It also reduces the jittery concern about holding a position in the final month of the option's life.

RIMM to release earnings after the close today. Are you in or out? I'm hanging in.

John M.

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About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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