Stock Market Day-Trading Discussion Thread

[quote author="muzie" date=1226123421]I would have to say anybody who holds these 3X ETFs for more than... an hour, is brain-damaged. Or needs to be parted with his money as soon as possible.



Take only a pretty pedestrian (nowadays) whipsaw going from 100 to 95 the next day than back to 100 the next day. That's -5%, +5.3% in a 2-day succession. This translates to -15%, +15.8%. The 3x ETF will go from 100 to 85, then back to 98.42.



Congratulations, nothing happened in the market but you gracefully handed over 2.25% of your position in 24 hours. Where the money ended up is anyone's guess. Some accounting line somewhere.



A less mundane whipsaw of a drop of 20% followed by going back up to the prior level the next day will hit you with a 30% loss, again, in a market where nothing happened.</blockquote>


I'm new to these inverse ETFs. If there was a drop of 20%, but went back to the prior level, how is one hit with a 30% loss? Also if it went from 100 to 95 to 100, how is that -5% to +5.3%?



I'm not a day trader, but I have been buying and selling SDS for the past month for a modest gain.
 
[quote author="usctrojanman29" date=1226373920][quote author="usctrojanman29" date=1226364337]Things aren't holding up very well today...the 1-month treasury bill yield declined from .14% to .11% and the 3-month treasury bill yield declined from .35% to .28% in the past 2 hours. Oil has dropped from about $65 to under $61 over that same period while the down was up over 200 and now is up 50. Could this rally be running out of steam already???</blockquote>
Check that...the 1-month bill is @.08% now and the 3-month bill is @ .24%. Looks like people are running for the hills.</blockquote>
Looks like we are down again...the 1-month is @ .04% and the 3-month is @ .20%. We are getting closer and closer to a negative return on the 1-month (that to me is the true fear factor).



Look for the lows back on Nov. 6th....the Dow hit 8,607, the NASDAQ hit 1,604, and the S&P hit 900. If we break those numbers, especially on a closing basis, I think we are heading for a re-test of the lows in the next week or so. If those levels aren't broken then we'll probably rally a bit. Of the 3 indexs, the NASDAQ looks the weakest and the DOW the strongest.
 
[quote author="usctrojanman29" date=1226378350][quote author="blackvault_cm" date=1226377031]Oh yeah...almost forgot. WMT is reporting Nov 13. There is no better consumer spending gauge than WMT imo...should be an interesting day.</blockquote>
Black, I have 1 Nov 97 S&P Put and 1 Nov 92 Dow Put that will be expiring next Friday...when do you think a good time to dump them will be (I had 5 of each but sold them before the late Oct rally)?</blockquote>
I dumped the Nov 92 Dow put for $7.45 a few minutes ago and will probably dump the Nov 97 S&P put later on today. I still have 2 Jan 96 Dow puts and 4 Dec 35 QQQQ puts that I'll be keeping for a bit longer.
 
[quote author="blackvault_cm" date=1225985263]Here is my play to expand my bearish portfolio...

I analyzed the following stocks...FSLR, XOM, KBH, MS and ENER

These are based on volatility/probability/payout models as well as pricing models.



FSLR has the best value @ 125/3.85 (21% decline/59% payout) or 125/3.85 for (31.6% decline/447% payout)

XOM has the best value @ 70/2.60 (11.5% decline/8.33% payout) or 65/1.25 for (21.3% decline/360% payout)

KBH has the best value @ 15/0.95 (22.3% decline/63.1% payout) or 12.5/0.25 for (31.6% decline/400% payout)

MS has the best value @ 17.5/2.05 (23.8% decline/19.51% payout) or 15/1.1 for (32.6% decline/118.8% payout)

ENER has the best value @ 40/5 (21.3% decline/ -20% payout) or 35/255 for (31.4% decline/113.7% payout)



Based on these my plays are:



FSLR @ 125

XOM @ 70

KBH @ 15 and 12.5

MS - skipping, poor payouts for the risk even on the highest valued puts

ENER - a hell no...overpriced



Also, 25% of my portfolio is in GLD March calls.



***Don't take any of this as a trading tip. I'm simply giving my play and use this data at your own risk.</blockquote>


The above post is for you Muzie....tell me from the day I posted this how it has panned out...



I'll do it for you...





FSLR bought at 3.85 X 10 puts - current value 18.00 = 14,100 net profit. Going to sell 5 today and keep the other 5.

XOM bought at 2.6 X 20 puts - current value 4.75 = 4300 net profit. Selling in about an hour.

KBH bought at 0.95 x 30 puts - current value 2.95 = 6000 net profit. Going to sell half in about an hour.



I'm not apologizing for doing it right.



BTW I'm also down about 8 a share on CSCO, 7 a share on XOM, 2 a share on NVDA....but they are my long position and I don't care atm and will use cash from puts to cost average. But yes, I do happen to be down about 85K on those 3 alone.
 
[quote author="usctrojanman29" date=1226453391][quote author="usctrojanman29" date=1226378350][quote author="blackvault_cm" date=1226377031]Oh yeah...almost forgot. WMT is reporting Nov 13. There is no better consumer spending gauge than WMT imo...should be an interesting day.</blockquote>
Black, I have 1 Nov 97 S&P Put and 1 Nov 92 Dow Put that will be expiring next Friday...when do you think a good time to dump them will be (I had 5 of each but sold them before the late Oct rally)?</blockquote>
I dumped the Nov 92 Dow put for $7.45 a few minutes ago and will probably dump the Nov 97 S&P put later on today. I still have 2 Jan 96 Dow puts and 4 Dec 35 QQQQ puts that I'll be keeping for a bit longer.</blockquote>


Taking profits is healthy and the right thing to do usctrojan. Scratch dumping my puts in an hour. I made my moves right now in case we rebound. The rest of my puts is free money, and I think we go lower over next couple of weeks.



PLUS, i don't want to NOT be in puts in case they decide not to bailout GM. If they leave GM rott as they should...look out BELOW!

2M+ layoffs can't be good...
 
[quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...
 
[quote author="blackvault_cm" date=1226454192][quote author="usctrojanman29" date=1226453391][quote author="usctrojanman29" date=1226378350][quote author="blackvault_cm" date=1226377031]Oh yeah...almost forgot. WMT is reporting Nov 13. There is no better consumer spending gauge than WMT imo...should be an interesting day.</blockquote>
Black, I have 1 Nov 97 S&P Put and 1 Nov 92 Dow Put that will be expiring next Friday...when do you think a good time to dump them will be (I had 5 of each but sold them before the late Oct rally)?</blockquote>
I dumped the Nov 92 Dow put for $7.45 a few minutes ago and will probably dump the Nov 97 S&P put later on today. I still have 2 Jan 96 Dow puts and 4 Dec 35 QQQQ puts that I'll be keeping for a bit longer.</blockquote>


Taking profits is healthy and the right thing to do usctrojan. Scratch dumping my puts in an hour. I made my moves right now in case we rebound. The rest of my puts is free money, and I think we go lower over next couple of weeks.



PLUS, i don't want to NOT be in puts in case they decide not to bailout GM. If they leave GM rott as they should...look out BELOW!

2M+ layoffs can't be good...</blockquote>
I agree with you on the GM thing. Btw, I'm gonna PM you to see what other decently priced options and maybe do a small straddle play on GS.
 
[quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>
Maybe a straddle play on GS would be better??? Check your PM.
 
[quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>
Nice and it looks like BAC just hit a new 52 week low earlier. The thing that makes me wonder is why such garbage regional banks like KEY or ZIONS stocks are still holding up relatively well. I mean, I went up against these two banks in commercial real estate lending and got beat by lower rates and higher leverage. I know for a fact that ZIONS has some horrid loans at California Bank & Trust (lots of residential construction loans) and Nevada State Bank (lots of land loans).
 
[quote author="usctrojanman29" date=1226457509][quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>
Maybe a straddle play on GS would be better??? Check your PM.</blockquote>


I haven't done any analysis on what possible good plays are. I'll do that tonight and can brief you. As far as GS its tough because the 5-10% movements HAVE to continue to happen in order to profit here. The option premium on calls/puts are astronomical. That is why I shy away from it. I don't like to play an option where I have to have the stock move 30% in order to profit. For me, its just too much risk.



If you are going to play this before earnings...I would place a small bet (straddle) and I would do it on deep out of money options. Perhaps 85-90 call strike and 60 put? I haven't done the calcs so I can't be sure, and right now I don't have the time as this market is turning and I might place some calls here.
 
[quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>


Well looks like the market is turning around and GS is blowing away. Hopefully you still went with your instinct if this moves higher.
 
[quote author="blackvault_cm" date=1226458877][quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>


Well looks like the market is turning around and GS is blowing away. Hopefully you still went with your instinct if this moves higher.</blockquote>
Market was rallying on the Fannie Mae news conference. All they are doing is delaying the ultimate outcome, FORECLOSURE. They aren't going to cut the loan balances, just lower the rate for a while (they'll just add the principal loan balance they cut to the back of the loan). What a bunch of garbage, it's like putting a piece of crap in a nice pretty little box. haha
 
[quote author="usctrojanman29" date=1226459513][quote author="blackvault_cm" date=1226458877][quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>


Well looks like the market is turning around and GS is blowing away. Hopefully you still went with your instinct if this moves higher.</blockquote>
Market was rallying on the Fannie Mae news conference. All they are doing is delaying the ultimate outcome, FORECLOSURE. They aren't going to cut the loan balances, just lower the rate for a while (they'll just add the principal loan balance they cut to the back of the loan). What a bunch of garbage, it's like putting a piece of crap in a nice pretty little box. haha</blockquote>


I agree, we are stil going to head down. But temporary the market might have an orgasm as a result. I feel really good on dumping half of my puts earlier...just shows how if we were to be greedy it would have hurt us on the rally there.
 
I'm going to relax for the day. I have no clue where this market is going interim as I'm not clear what the govt is trying to cook.

If this market rallies till the end which it probably will...I'm going to rebuy xom puts, definately FSLR as we see how fast that can crash, and though Id love to buy GS...I still can't get over the high costs of puts or calls.
 
[quote author="blackvault_cm" date=1226459604][quote author="usctrojanman29" date=1226459513][quote author="blackvault_cm" date=1226458877][quote author="blackvault_cm" date=1226454539][quote author="graphrix" date=1226396103]I heart volatility. Sold the BAC puts for $1.65 today. This idiot made a 65% return in just a few days. Now I just need to look for the next opportunity, and I still feel that volatility will rule the day. Mmmm... heavy volume on the near the money GS calls...</blockquote>


I hope you got my PM last night that GS calls aren't a good play right now...</blockquote>


Well looks like the market is turning around and GS is blowing away. Hopefully you still went with your instinct if this moves higher.</blockquote>
Market was rallying on the Fannie Mae news conference. All they are doing is delaying the ultimate outcome, FORECLOSURE. They aren't going to cut the loan balances, just lower the rate for a while (they'll just add the principal loan balance they cut to the back of the loan). What a bunch of garbage, it's like putting a piece of crap in a nice pretty little box. haha</blockquote>


I agree, we are stil going to head down. But temporary the market might have an orgasm as a result. I feel really good on dumping half of my puts earlier...just shows how if we were to be greedy it would have hurt us on the rally there.</blockquote>
Yup, I dump the 1 NOV 97 S&P Put @ $8.55. I'm out of all the NOV options now. Still holding onto my 4 DEC 35 QQQQ Puts on my 2 JAN 96 DOW Puts and the rest is in cash. I will be traveling all day Thursday and Friday so I wanted to make sure I was out of my Nov options.
 
[quote author="blackvault_cm" date=1226460019]I'm going to relax for the day. I have no clue where this market is going interim as I'm not clear what the govt is trying to cook.

If this market rallies till the end which it probably will...I'm going to rebuy xom puts, definately FSLR as we see how fast that can crash, and though Id love to buy GS...I still can't get over the high costs of puts or calls.</blockquote>
I love when I see the markets run up like this on garbage news (pumped up by short covering profit taking), just gives me more opportunities to pick up put options that much cheaper.



Btw, take a look at the Nikkei intraday chart today and look at the US market charts...they look very similar (selloff early then bounce around the low and then rally towards the end of the day with a modest selloff in the last hour). I wonder if the pattern holds true and we sell off modestly in the last hour.



Btw, I have a strategy that seems to work about 80-90%. I've noticed that the market rallies going into Fed meetings (the day before and day of). So the play would be to pick up call options on the indexs the day before the Fed meeting and then dumping them before 11am (15 minutes before the announcement). Worked like a charm back in Oct.
 
[quote author="usctrojanman29" date=1226461041][quote author="blackvault_cm" date=1226460019]I'm going to relax for the day. I have no clue where this market is going interim as I'm not clear what the govt is trying to cook.

If this market rallies till the end which it probably will...I'm going to rebuy xom puts, definately FSLR as we see how fast that can crash, and though Id love to buy GS...I still can't get over the high costs of puts or calls.</blockquote>
I love when I see the markets run up like this on garbage news (pumped up by short covering profit taking), just gives me more opportunities to pick up put options that much cheaper.



Btw, take a look at the Nikkei intraday chart today and look at the US market charts...they look very similar (selloff early then bounce around the low and then rally towards the end of the day with a modest selloff in the last hour). I wonder if the pattern holds true and we sell off modestly in the last hour.



Btw, I have a strategy that seems to work about 80-90%. I've noticed that the market rallies going into Fed meetings (the day before and day of). So the play would be to pick up call options on the indexs the day before the Fed meeting and then dumping them before 11am (15 minutes before the announcement). Worked like a charm back in Oct.</blockquote>


Yup. I'll have to look into your strategy...makes sense.



Looks like market is turning indeed. Rare do I get to see instant profit on something, but as soon as I finished buying xom and fslr market started going south...I'm just afraid of reversals.
 
[quote author="blackvault_cm" date=1226464576]Just when you think you can relax, the market gives you new opportunities....love it, love it, love it...</blockquote>
You can never relax in this market...the volatility gives you great opportunities but can turn your position on a dime. Looks like we are selling off into the closing. A close below the 3 Nov 6th lows and we for sure are heading for a re-test in the next few weeks. There are a few wildcards out there....retail sales data on Friday and possible GM bailout.
 
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