Let's Trade Options

I mentioned earlier how people need to keep a check on their greed...well, FEAR is another emotion that needs to be reined in every one in a while.

I was looking over my notes and emails and back on the 29th of November I recommended an option to a buddy of mine that wanted me to "give him a good one, Santa needs some cash!"....well, I recommended ALK Dec18 75 PUT @ $2.25 or better. He got in at $2.35 the next day. it dropped and did well a couple of days, and then gapped up and went back up to almost what the stock was trading at when he got in. I told him that would be fine, that he has plenty of time left, but he got spooked and got out (FEAR). The stock dropped big time and eight days later the bid price was $14.90 at the open! I had talked him in to 25 contracts and that was over twice what he normally trades, so he was scared of losing money..... but that caused him to miss almost $32K in profit.

Sometimes a trade has to 'breathe', and if the reason that the trade was good to begin with really hasn't changed, don't let your fear cause you to get out of a good trade. There is a big difference between caution and fear.....

I don't often sweat any trades. I am almost always in spread trades that have defined risk, and the risk is sized to be something that makes sense in the overall book for the account - overall equity, relationship to other trades, allowable drawdown, etc. If I am sweating, it means I have gone past my limits of how much equity I may be putting at risk. I'm human - I get greedy and put too much at risk sometimes. Then I open myself more to fear that can adversely affect how I manage those positions that are too large.

I got into options trading so I could trade safely and still have opportunities to make large returns. I am trading with money I had to work for - pretty much the equivalent of my blood. The number one priority for me is to not lose much of it.

the story for the rest of the year will be told Wednesday. If the FOMC says some dovish words, stocks will rally. Otherwise, more bear. How ya gonna trade it?

https://realmoney.thestreet.com/inve...HOO&yptr=yahoo

AMZN now shed 25% in the last 10 weeks. Where will it trade after the Q4 ER?

I think AMZN still has some downward movement left on Daily, Weekly and Monthly charts, probably around the 1400 level. The monthly chart is very close to showing a good upward bounce, but that may be mid-January before we see it materialize.

I was shopping AMZN call verts for Feb18 today - after the Q4 earnings are out. Tried a $1770/$1780 vert for $1.75, missed by a nickel. I could see AMZN getting back >50% of what it has lost by late Jan if things settle down...

Lots of stocks looking to make a move up, so that's a good sign. This close to the holidays, may not make it this calendar year, though.

That being said, I am going to look this in the morning:

BBY Jan4 52.5 CALL @ $1.55 or better

bots chomping at the dots, jpow bring the dove meat. We could see the indices pop >5% in the next 3 td's

In BBY Jan4 52.5 CALL @ $1.65

It popped up this morning, so had to pay a little more. Should be worth it....

SMART MONEY maybe says I'll fade that

The way I see it, the Fed is gonna raise today and put out some words to try and calm the market. But since that is expected, I think it is already priced into the market. And with a stop gap spending bill being voted on today to prevent a partial government shutdown is going to further relax some people. I doubt if we get anything screaming to the upside, but I do think it will meander that way the rest of the year....lots of stocks are looking to pop up very soon....

yep. I stayed flat in the run up, looking for bull sign, no rush

Stocks are going to rally. I still believe in santa. We should see spoos >2,700 to close the year. This dip off the fomc's completely expected action today is your xmas present. Go long.....

idk it might not happen until earnings, another 3 weeks away...need some good news from US/China trade war. maybe in the coming week

govt shutdown for Xmas, Santa dead and gone, oh the humanity, save yourselves......

a bounce into the close means the Santa rally has begun.

Ho ho ho motherfuckerz

Dude.

Oil damn.