Stock Market Day-Trading Discussion Thread

[quote author="WINEX" date=1225406653][quote author="graphrix" date=1225404637][quote author="WINEX" date=1225370692]I'll enhance your Public Service Announcement



The VIX is at 69.96 right now. The VIN is 73.64.



Though these levels are a little off the all time highs set in recent weeks, they are at nose-bleed levels. ANYONE who is buying options right now is an idiot. (That includes people lucky enough to be on the winning side of trades. Just because you got lucky does NOT mean that you aren't still an idiot)



Simply put, volatility where it is at, options are too expensive right now. It is a far better idea to be a seller of options than a buyer of options right now.</blockquote>


Wow! Somebody decided that their bitter and angry attitude was getting old in the politics thread, and decided to bring it in here. Talk about a negative Nelly. Yeah... buyers of options are idiots, I buy options, so I must be an idiot. Yeah... that is why BV and I are 1 and 2 in the Panda challenge. Now go eat your angry sandwich and bitter chips in the politics thread. We don't need that kind loser like attitude here.</blockquote>


Why is it that you liberals always feel a need to control other peoples lives? As a moderator, are you telling me that I am not allowed to post in this section?</blockquote>


First of all, Graph is NOT a liberal. He's quite centrist if ever bothered to read his posts without your filter flashing its red light in your head that tells you that anyone who happens to disagree with you is not only a liberal, but also an idiot. Everyone is entitled to their opinions, but what I take issue with, and I believe others do as well, is the way that you insist on calling everyone who disagrees with you an idiot.



I can't recall the quote word for word, but I read this in college and it never left me, "always listen to opinions that differ from yours as you will either form a new opinion or understand your original opinion better." In other words healthy debate is a way for all of us to expand our views and understand better why we believe what we do. So please stop calling everyone who disagrees with you an idiot and stick healthy debate.
 
[quote author="blackvault_cm" date=1225418197]Being an idiot, I'm giving away about 30K by buying Dec/Jan put options right about..........NOW.



Oh and probably another 30K down the road...send me a PM if you have some to sell me.</blockquote>
Hang in there, this rally looks like it's running out of steam. I don't see the DOW crossing 9,400 (that looks like a decent resistance level).
 
[quote author="usctrojanman29" date=1225424253][quote author="IrvineRenter" date=1225424010]I made money today.</blockquote>
What were your trades?</blockquote>


When the morning selloff trendline broke at around 9:30 our time, I waited for a pullback and went long QLD and took a quick profit. When the rally pulled back to support at around 10:00 our time, I went long QLD and QQQQ and sold into the ensuing rally. When the rally trendline was touched at around 10:45, I went long QLD again and sold at the daily R1.



4 trades, all were profitable, and I did not endure any drawdown.



It was a good day.
 
[quote author="WINEX" date=1225406653][quote author="graphrix" date=1225404637][quote author="WINEX" date=1225370692]I'll enhance your Public Service Announcement



The VIX is at 69.96 right now. The VIN is 73.64.



Though these levels are a little off the all time highs set in recent weeks, they are at nose-bleed levels. ANYONE who is buying options right now is an idiot. (That includes people lucky enough to be on the winning side of trades. Just because you got lucky does NOT mean that you aren't still an idiot)



Simply put, volatility where it is at, options are too expensive right now. It is a far better idea to be a seller of options than a buyer of options right now.</blockquote>


Wow! Somebody decided that their bitter and angry attitude was getting old in the politics thread, and decided to bring it in here. Talk about a negative Nelly. Yeah... buyers of options are idiots, I buy options, so I must be an idiot. Yeah... that is why BV and I are 1 and 2 in the Panda challenge. Now go eat your angry sandwich and bitter chips in the politics thread. We don't need that kind loser like attitude here.</blockquote>


Why is it that you liberals always feel a need to control other peoples lives? As a moderator, are you telling me that I am not allowed to post in this section?</blockquote>


Oh boy... here we go again. Totally and completely taking what someone wrote so far out of context, you have to wonder if it is a reading comprehension problem, or blindness from their own anger and bitterness. Sadly, after I have repeatedly called you out on this, and how Nude eloquently pointed out how you are a spinster and master of distortion, you still don't get it.



If you had actually explained why buying options was risky, and explained how writing options is less risky, then I would welcome the discussion. But, instead, you lower yourself to that of 6 year old and try to insult those buying options by calling them an idiot. You provide nothing of value when you post something like that. All it does is reiterate yourself as a bitter, angry, and lonely childlike person who is used to not being accepted. Are you that blind to not see what a miserable and angry person you come across as? I can understand the passion when it comes to politics, but there is no reason to bring that attitude when it comes to discussing options and trading. Trading with emotion is for Panda, and losing money is for people who trade with emotion. You just keep alienating yourself by saying things like that, and you should get that by now, since Nude pointed that out to you as well, but you seem to like being the angry, bitter and ignorant one.



Sadly, I still don't think you will get it, and you will just say how you don't care what people think, I will what I want to say, you liberals can't control me. So, since you have already had your lunch of angry sandwich and bitter chips, I offer you a whine and pout soda before you do post.
 
[quote author="blackvault_cm" date=1225424981][quote author="usctrojanman29" date=1225419351][quote author="blackvault_cm" date=1225418197]Being an idiot, I'm giving away about 30K by buying Dec/Jan put options right about..........NOW.



Oh and probably another 30K down the road...send me a PM if you have some to sell me.</blockquote>
Hang in there, this rally looks like it's running out of steam. I don't see the DOW crossing 9,400 (that looks like a decent resistance level).</blockquote>


Oh I'm not worried. GDP numbers were garbage...I mean we gained a percent or so to the GDP due to government spending?

Oh also 0.6 percent due to "computer" spending and that was made possible through hedonics...(go look up hedonics and you'll see what a joke this is)



Big picture is that consumer spending tanked, but its ok...as long as our government continues to spend money our GDP will be fine right? lol



Second....GDP numbers, CPI, unemployment etc are being manipulated. Our government isn't honest when they report these figures thus we are in the mess we are in right now. Sooner or later it will catch up...truth will be exposed. Many other sites show Q3 actually contracting -2.5-3% not -0.3%.



Anyway, my day to day timing accuracy isn't 100% and nobodys is. But I will be ready when this economy tanks.



I mean do you really think that we are going to get off this easy? More pain will come.



<u>As far as trading.</u>

Lost 6K in recent November options. Replaced them at the high today with December/January. I'll continue to do so two more times as I have two more bullets left to cost average.</blockquote>
I'm down about $700 from my puts from yesterday. We may have had some mutual fund window dressed before 10/31/08. If you look at the chart of the DOW for the past two days, it looks like there was a range established between ~9000 and 9400. The Dow couldn't break below the 9000 mark today (soft resistance) and had difficultly today and yesterday going through 9400 (hard resistance). If we rise up above 9400 with strong volume, we may see Dow near 10,000 and if we break below 9000 we will see DOW 8000 or lower.



As for the NASDAQ, on a decent up day a few of the heavyweights were down...MSFT, CSCO, RIMM, AMZN, and a few others big dogs were down. I think 1750 is the resistance on the NASDAQ. Besides the BS GDP number this morning, I also blame the melt-up of Asian and Euro stocks for our positive day, but they think they'll be turning down soon enough.
 
I know you guys are beating up on WINEX, but his point is valid. Options are way too expensive right now. If, no make that when, volatility declines, the value of options are going to plummet. You could be right on the trade, and right on the timing, but if the volatility does not stay high, you could lose money anyway.



The only option trade I think makes sense is a volatility breakout trade. If you see a stock in a long consolidation after a healthy trend and premiums are very small, puts and calls can be an inexpensive way to play the movement out of the consolidation. There is an indicator floating around where the Bollinger Bands go inside the Keltner Channel that indicates when volatility is unusually low. If you get on the right side of one of those, you get both the movement of the underlying and the increase in volatility.
 
Guys guys, let's keep the discussion civil, or this interesting thread will die down very quickly.



In my view I wouldn't want to be a buyer of options in this environment, though I wouldn't call an option buyer "an idiot".



People have different timeframes, too. Most option buyers seem be trying to make plays for a few days, and options sellers are looking forward to the next month or more. If the stock/index swings around and ends up finishing up at the same point at month's end, then there's plenty of money to be made by both buyers and sellers.



I'm of the opinion that no one can become a master of anything before being an idiot at it at first - so being "an idiot" is ok. You can't read 20 books on options and then think you're past the newbie stage. So one simply needs to start small and go from there.
 
[quote author="IrvineRenter" date=1225434396]I know you guys are beating up on WINEX, but his point is valid. Options are way too expensive right now. If, no make that when, volatility declines, the value of options are going to plummet. You could be right on the trade, and right on the timing, but if the volatility does not stay high, you could lose money anyway.



The only option trade I think makes sense is a volatility breakout trade. If you see a stock in a long consolidation after a healthy trend and premiums are very small, puts and calls can be an inexpensive way to play the movement out of the consolidation. There is an indicator floating around where the Bollinger Bands go inside the Keltner Channel that indicates when volatility is unusually low. If you get on the right side of one of those, you get both the movement of the underlying and the increase in volatility.</blockquote>


In addition to that, buying deep in the money options (in whichever direction you are interested in) can create somewhat of a margin of safety. Of course, it goes back to my original point. Options are overpriced right now because volatility is off the charts. It's a far better idea to be a seller of options right now than a buyer of options.



If anyone is interested, I can post a couple of macros that work in Telechart that can be used to spot breakouts or breakdowns from congestion.
 
[quote author="blackvault_cm" date=1225435997]<blockquote>The only option trade I think makes sense is a volatility breakout trade. If you see a stock in a long consolidation after a healthy trend and premiums are very small, puts and calls can be an inexpensive way to play the movement out of the consolidation. There is an indicator floating around where the Bollinger Bands go inside the Keltner Channel that indicates when volatility is unusually low. If you get on the right side of one of those, you get both the movement of the underlying and the increase in volatility.</blockquote>


What you described are purely technical trades. Technical trades are fantastic when the market behaves on fundamentals.

You see we are in a time where the market isn't sane. It isn't healthy. People thought a VIX of 40 was ridicilous, then 50...well it went as high as 70s. Are you suggesting that in the next week or so it can't pop higher than its previous high?



The number #1 thing that drives my trades is interpretation of human behavior not technicals. (thought they assist)



Human Behavior ---> Money Flow ---> Advance/Decline in the Underlying Asset.



I told people I was buying puts/calls weeks ago, and many have said VIX is high you are wasting your money on option premiums. I ignored it, and profited. I will ignore it again, and place my trades accordingly.



Why you might ask? Because our economy is going to hell.</blockquote>


The Four Most Dangerous Words In Investments: "This Time It's Different". Ever read that one before?



I spent years preparing myself for a bear market, reading up on how I should react, protect myself, and how I should reason about the situation. I wasn't very successful in sidestepping the damage as I would have liked (mainly underestimating how even fairly recession-resistant investments would tank), but nowhere in any of my studies did I see anything about panicking and then betting on the end of the world. And yet, this is exactly what I see a lot of people advocating (not here specifically).
 
[quote author="ventouxbob" date=1225437650]= yeah but does anybody like the Ford idea?



I'm not really a trader but i enjoy reading here.</blockquote>


It's just a lot of risk for a lot of reward. Why not bet on companies that have been unfairly punished instead but that should recover quickly in the case of a return to normality?



Earlier in the year I would always buy puts on companies where the company was dependent on government/federal reserve protection for its survival. Bear Sterns, Lehman Brothers, AIG, Freddie, Fannie Mae. In every single case, when the government came through, it was always a horrible deal for the shareholders and they either got wiped out or the stock was worth pennies.



The only case that would have been profitable would have been Freddie.. if you bought AFTER the government took them over.
 
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