Let's Trade Options

MM

I have outlined the criteria for you with the long trade call options and I am sure you understand it.

DBMS driven

I filter candidates from the universe of CBOE tickers with options traded .. 4500 off each day

I then filter then for a SMA criteria on these to get liquidity .. brings it down 2000 or so each day

This then reverse filter to my set of rules .. finds the tickers that pass .. about 1000 each day make it through that hoop

I then run my model and it finds about 40 - 50 each day that are tradable, new potential positions

At this point I am like a dogs with two dicks

So i literally start at the top of the charts of the 50 and take the best looking 5 or so and the others drop off the radar

Not that elegant but if I cannot manage any more

It is solid and I do not have sweat too many open positions

Would like to automate the trade placement and management portion through IB and that is a project on the list

HTH

Sounds like a solid system. I only watch about 350-400 stocks, and with that, usually 0-10 potential each day, and that is easily narrowed down to about 1-5. Can't imagine having to narrow down 40-50 per day, especially if it is possible to get 40-50 different ones the next day!

Maybe out of the 40-50 potential trades you could track those that did the best and determine if there was something about them that was common to those but not the ones that did worse, and narrow the 40-50 down even further by adding that criteria? Kind of like reverse engineering it.......

Just don't get too stressed out, though, it will take the fun out of it. I remember several years ago I was trading options during the day and forex at night....after a few months of that, I would go to Walmart after the market closed when people were getting off work and just push a buggy around so I could see people I knew and have some social interaction. That was a very profitable time, but very stressful.....after about 9 months I couldn't do it any more, so I just traded off the Daily chart for forex and that freed up a lot of time right there.

I have some Hail Mary bids out on COST Mar19 CALLs with strike prices from 325 through 330....whichever one gets hit is fine with me....

In the following:

COST Mar19 325 CALL @ $5.65

More than what I normally pay, but closer strike, so should make some good money...

Its the same thinking behind and the same technical breakdown pattern on both WMT and COST

Those parrots are gone bye byes and they need accumulation to appear in terms of high volume buying before they will move upwards

We are waiting for a selling climax ... see attached pix

In the following:

WMT Mar12 131 CALL @ $0.50

Not sure about Wyckoff Logic, but I know Moneymaker2 Logic produces a goodly amount of money. I must admit I do like the "Jump the Creek" and "Break the Ice" names on the above chart, though.

Most likely I am doing it totally wrong according to many people, but that's okay with me. Why? Because I wasn't kidding when I said I could buy a new truck to pull a 40ft sailboat with those handful of trades last month! Why would I not believe in my method after all these years because it goes against a Wyckoff Logic PowerPoint slide?

I like my system, I am comfortable with it, and it is profitable. For the last few years I have tried to put my trades on here as close to real time as I can without interfering with the actual trading, so people can see for themselves. Periodically I will take a risk, such as trading off a Weekly or Monthly chart rather than a Daily one, or like with Costco earlier today (I don't trade within a few days of earnings, but I wanted to take a chance getting in before earnings announced today because I was betting they would beat expectations due to online orders and opening up stores in more areas). They just announced and missed expectations by 13%, so I was sure wrong on that one! But it isn't the end of the world, I'll just maybe close the trade tomorrow and take a loss and move on.

I do appreciate your input, though, just don't be offended if I don't always agree.

But I extend an invitation for you to put your real time trades on here, too, just to show how your system is capable of performing. Not the details of your methodology, of course, just the trades and results. It is always nice to see how others are doing in this trading jungle....

MM2

I wont do real time stuff because the madding crowds will start to howl and they want this and they want that whilst acting as total sponges and not putting back into the knowledge and learning pool

Brutal, yes but I have learnt from a lifetime of observation on swamps like FF

The wheat from chaff conversations get harder to find in these times of people having fast internet connections and being bored at home

Having said that MM you do get it and put in and am happy to discourse on options

Methinks SPY will crap out again Friday and possible bounce later next week

Check attached history of WMT calls .. very scary trade from my perspective and time expiry but each to his own

Cheers

8 days now till expiry ...

OK later on ...

Noticed that OI increasing ergo more of this strike and series being written and the volume traded is a minor increase

Given that I believe the options market is more refined than pure equities, especially volume what would you assume the options numbers are telling us about the underlying ?

Just asking

Going by that, one would think that since there are more options traded, there is more anticipation for a move up.

But, Open Interest is not always correct. I have purchased 100 contracts before and held for 3 days and never saw the increase. I have also had a bid hit below the "low" of the option, and have seen Level II quotes with activity that was not indicated on the T&S table until well after the fact, or not at all, depending on which exchange it went through.

I am not sure if investor sentiment is a big factor, either, as I have had charts indicating an up move while option volume steadily increased in the PUTs, and then it went up. Granted, lots of people can be doing what I have done and sell options in the opposite direction of where you think it is going, and lots of people that own the stock use options as insurance against a move down.

But any information that can help someone determine a move is certainly worth looking at....

Out of the following:

COST Mar19 325 CALL @ $4.00 down from $5.65

I will be watching this for another possible entry early next week.....

Out of the following:

AAL Mar19 21 PUT @ $1.70 up from $0.97

Had an alert my Ask was hit.....after ~10 minutes, it showed up on T&S, Open Interest hasn't changed. Also, the high still indicated $1.64. Lots of delay all around.

I think if you have a stagnant Bid or Ask that doesn't move for a while or is GTC, the market makers will clear it out to allow the spread to open back up. Just my theory....

UPDATE: THE ALERT WAS FOR THE PURCHASE OF THE OPTION, WHICH OCCURED ON MARCH 1.....SO THE TRADE IS STILL ACTIVE. EXPLAINS WHY NOTHNG SHOWED UP, I GUESS.....NO IDEA WHY THE LATER ALERT, I DIDN'T EVEN READ IT WAS FOR THE PURCHASE, JUST ASSUMED IT WAS FOR THE SELL AND MY ASK PRCE JUST ROLLED OVER TILL TODAY. I THOUGHT I HAD AN END OF DAY ORDER IN RATHER THAN A GTC....THOUGHT I WAS GETTING OLD AND FORGETFUL BUT IT WASN'T ME....HA!!

Ok, now OFFICIALLY out of the following:

AAL Mar19 21 PUT @ $2.00 up from $0.97

I KNEW I put in an order with an Ask price of $2.00 rather than $1.70.....

It might have been my phone that screwed up rather than the broker, as it has been doing very weird things over the last week or so. But then it is an iPhone 6 with a bad battery.....

My theory from above still stands, though...

Out of the following:

WMT Mar12 131 CALL @ $1.10 up from $0.50

Hoping for a small drop at the close to be able to get back in....

COST bounced back faster than I expected, so may look at that right at the close...

Any prop firm for options trading?

How to pre-know the price of maximum loss for a call/put buy?

these animated stats things on youtube are fun....

if you are just buying options all you risk is what you pay for them - i.e., the maximum loss is 100% of what you pay.

Yes i know but thats not the loss shown immediately on entry. The question at what PRICE?