Roll Out Your Red Carpet

I have a great feeling about this week. Roll out your red carpets and get ready to make money this week. It's nice to kick off the week on an up note. I noticed a bunch of good looking picks filtering through the chat today. I am putting a few stocks together for the weekly watchlist. I hope to get this up after lunch.

How about that "Trade of the Week" last week. Up another 9% today. Unreal. For those that don't know what in the world I am talking about, on Wednesday last week between Master Talk and the Marketcast the stock ORBC was used as a nice ripe growth candidate. Since then it is up huge, not to mention what the options have done.

Anyhoo...next post will be the watchlist. See you after lunch.

Jeff, As you wrote this the dow was
probably at +40 or so and now has
dwindled to +14 or so. The chatter
I have heard is a down week due to
fed interest rate B.S. Are you still bullish as long as the dow
finishes up by anything? I realize
the dow could still rally in the
end of this session also.I give you
props for putting your prediction
out there, and hope your correct.
Steve

Steve,

I hope to have a good week no matter what the Dow is doing. The averages might chatter a bit, bus focus on the stocks that are not chatterning. Find strength and trade it. Even if the market craps this week I have my mind set to make money this week. I hope it is contageous.

Jeff

I am so pissed! I got in on orbc and put a stopp on at $1.75 thinking that would give plenty of room. I got stopped out today. Why is it that the option when way down today and the stock price did not? AND WHY is it that the MARCH 10 call that I bought was the only option this happened on. The other options didn't have that wide of spread today? I don't get it.

Jeff and everyone,
I'm having one of those frumpy days. Down in the dumps as my calls are down and my puts are up. Except for CTRP. What an AWESOME day for it. It's kind of at the height of a channel right now, but it keeps on keeping on. BXP is not doing much today, but continues to look strong.
Looking forward to getting into a fresh batch in my watchlist. I have a retirement account (all stocks, no options allowed) that has done really well the last few weeks. The star performers are MA and POT, both of which would probably make good options.
Chris and Catherine

I like your thinking, regarding my
first entry.I too am going to make
money this week! steve
P.s. if i dont it wont be the
first time. If I do it will be the
first time, and hopefully not the
last.

Brenda,
Man, can't explain that one. I have the same call but I didn't put a stop on it (thank goodness!) It actually got all the way down to $0.80 today and the last trade (as of 3:45) was $3.70 All this while the stock itself is up over 6% !!! Go figure. Hopefully Jeff might have some insight into this one. I haven't had a lot of luck with stops on options. Got stopped out of GS when it was up on the day. Trading at the end of the day seems like the only way of really being in control (as opposed to "out of control" which is the way the rest of my life usually runs.)
Can't wait to hear Jeff's comments on this one.
Chris and Catherine

Chris and Catherine,

Does that mean that Frosty doesn't have a head again? Wild day for sure. I was up a bunch and now just OK.

Tom,
Frosty took one about three feet below the head on my last "frumpy" day, and refuses to play hockey with me anymore.
His loss.
Chris and Catherine

I know the feeling, after having 50% ROR on FCX got to exit with only 15% ROR. Jeff I know you told me to play this one defensive but when I left the computer the market was up and FCX was okay. Good thing I came on time to at least get some profit, other wise a winner will be tuning in a loser and I hate when that happens.

I took the NKE bounce, and it closed green. But will have to be carefull with the market being so unstable.

Jeff, I want to make money too and I pretty sure the rest of the group is, what can you play this week to be "safe"? Let's us know.

I too got taken by the ORBC Mar 10 option today like Brenda.

I look at it as a cheap lesson (I only had a couple positions) and am adding to my trading rules. I am removing any market stops I have on options right now.

I wonder if there will be a similar bounce in the option on Tuesday to allow me to get back in around the price I was dumped on? Hmm... I'm not going to hold my breath.

Guys,
you just experienced the effect of IV for the ORBC March 10 calls. THe IV dropped to 68% from arround 80%.
That is why it is important to keep an eye on IV also while doing option trades.

Mahmood

Actually this was not caused by a volatility drop. Volatility will not take an option premium below parity. In fact there is a rule that options cannot trade more than .25 below parity under any circumstance. The exchange kicked people out, however the prices are currently being adjusted. I will post more on this after the AMEX calls me back.

CRS and POT are looking good today.

Jeff,
What do you mean "below parity"?

Evening all,
One last comment for today. POT and NXY are both worth a hard look. POT is up and down a lot (making it a lot like Catherine, quite volatile, but quite attractive) and would make a great entry almost any time it's down at the end of a day.
NXY on the other hand is an oil and gas play that is up 20% in the 3 weeks that I've owned it (the stock, that is, not options) making it more like Chris. Unpredictable. But look at the flag it's formed. And it has been on fire while the price of oil has been tanking! I'm thinking this flag could break out at any time and if we see a jump in oil (like Chris... don't count on it) I think it'd be a license to print money. The pole is a $12 one, on a $60 stock.
That's it for tonight. I'm going to turn on the electric blanket, make ammends to Frosty, and call it a day.
Chris and Catherine

PS Randie, I believe Jeff was referring to the intrinsic value. If the stock's at $12.00 then the $10 option has $2.00 of intrinsic value and cannot trade below $1.75 (.25 below parity.)
Is that right, Jeff?

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  • 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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