Stock Market Day-Trading Discussion Thread

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Yep, I've been riding C and BAC for the last week. I think i put 1000 out there and it came back as 1933 in profit. So not quite great, but not bad. I didn't do so well with BAC, i only got about 50-55% profit.... Like you, i don't want to get greedy.

Sooooo.... you're paying for drinks! :lol:

-bix
 
At least you don't have to cover the top 3 winners all by yourself, and there is a chance that you might end up at Scott's at Deuce's expense.

skek said:
Based in part on Bond Trader's posts about the technicals of this rally, including the average rise and duration of past bear rallies, I'm starting to gradually shift from long to short positions. Yesterday I was 10:1 long. Today I'm about 50/50. I may hang out here for a day or two more. I figure I'll move the rest of the way short over the next week or so. I'm paying a bit of a premium and probably overpaying today, but I'm acquiring May and June puts to give myself some time. I'll keep cost averaging as this rally continues, but I'm beginning to think the next ride down *may* be to the ultimate bottom, so I'm going to be ready to go. This is of course just my fun account, real money remains largely in cash.

Of course, I have no idea what I'm talking about and I'll probably lose it all. If so, whoever wins 4th place in the NCAA pool will have to settle for the dollar value menu at Burger King.
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Diary of an Options-Trading Newbie

With this being March 21 - Expiration Friday, I have been reflecting on some of the trades I made this month and I am learning a lot through my mistakes. I figure if I am putting myself on the line, I might as well let other beginners learn from my mistakes too. You more experienced traders may find this boring, but I hope you will feel free to chime in with your tips as you see fit. I feel pretty exposed doing this, so please if you have something to say just be respectful. (I know you will anyway.) Hopefully this will encourage other, less experienced people, to join in and get this thread going!

At the beginning of the month, I purchased shares of CSCO @ $14.31 and a few days later, some more @ $14.22. It looked like we were having a pretty rough ride down, and I was given fair warning by a more experienced person that we could be headed for $12 per share. Due to shaky nerves and lack of familiarity with this stock’s behavior, I let myself get paranoid and when the stock showed barely a hint of life above what I paid, I wrote some March 15 strike covered calls at a ridiculously low premium of 27 cents. A few days later, it took a bit of a nose-dive and I passed up the opportunity to buy back my calls and close out my position. I don’t know why I didn’t do that. I just didn’t know any better, but I do now. Instead of executing a buy-to-close, I watched the stock recover from those new lows and pick up pace… far exceeding my strike price. As of closing today, the calls I wrote are 98 cents in the money and I expect them to be exercised. While I am not losing anything I have invested and am walking away with some so-so profits, I did pass up the chance to close out my position and take advantage of the rebound we experienced. Instead of riding out these cheap calls for the last three weeks – I could have written several more and at a premium of about five times what I initially sold for. Live and learn! This has prepared me to do better as I gear up for April contracts.

On March 12, I purchased shares of BAC @ $5.03. A day later, the stock rose by nearly a dollar and I wrote March 6 strike calls for 41 cents. The stock kept rising and as of yesterday – it briefly hit over $8.50, however as expiration quickly approached today, it was only about 20 cents above my strike price. Having second thoughts about letting these shares get called away, I debated whether or not to buy back my calls. I do not know where BAC is headed in the next day, let alone the next week, but I feel the price I paid of five bucks is fair enough and I did not want to let these get away. So with 10 minutes to spare before closing – I executed a buy-to-close at a 25 cent contract premium. Whether or not this is a good idea is yet to be proven. After everything was said and done with these BAC calls, I really did not come out ahead much at all but at the very least, I offered myself downside protection. We will see what happens next week…

My goal starting Monday is to not be so trigger-happy with writing calls. I am going to look for a larger up-swing with our ready-steady friend CSCO and contract premiums of closer to a dollar before making a move. As for BAC, if we see some nice numbers next week, I may just cash out and walk.

I hope some more ladies might feel like they want to share their experiences with options. I know as women we tend to be hesitant to jump in. Just remember that Ginger Rogers did everything Fred Astaire did, except backwards and in high heels!

Happy Trading!
 
SoCal78,

Thanks for sharing your experience, and not bad for a newbie. Just so you know, most of us "experienced" traders make mistakes and are always learning. I look forward to learning more from you, and I am sure you will do even better next time. I speak from experience on this... some times you just have to trust your gut. Whereas that would have helped you close out your calls, it may not have helped you when you wrote your calls. You will have a lot of what ifs, and I blew it today by not buying puts on SSO in the AM. My gut said so, but my over thinking mind killed the idea. The technicals were all there too. I know you are watching many of the same technicals that I am watching, so trust them too.

Pretty soon we will be looking forward to your trading posts the same way we do BV's posts. And... we will have forgotten all about him... ;-P
 
skek said:
Based in part on Bond Trader's posts about the technicals of this rally, including the average rise and duration of past bear rallies, I'm starting to gradually shift from long to short positions. Yesterday I was 10:1 long. Today I'm about 50/50. I may hang out here for a day or two more. I figure I'll move the rest of the way short over the next week or so. I'm paying a bit of a premium and probably overpaying today, but I'm acquiring May and June puts to give myself some time. I'll keep cost averaging as this rally continues, but I'm beginning to think the next ride down *may* be to the ultimate bottom, so I'm going to be ready to go. This is of course just my fun account, real money remains largely in cash.

Of course, I have no idea what I'm talking about and I'll probably lose it all. If so, whoever wins 4th place in the NCAA pool will have to settle for the dollar value menu at Burger King.
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Looks like you can upgrade that from the dollar value meal after today. Nice trades.
 
Thank you guys. I owe everything I have learned thus far to two of the best teachers.... Professor Blackvault and Dr. Google. I am learning from reading your posts too and hope you will continue.
 
skek said:
I know I'm not the only one who is impressed with how fast SoCal has become fluent in the language of stock market trading! Thanks for sharing, and for the record, I made the exact same mistake with AA this month -- didn't buy my covered calls back at a 20%+ gain, and it will end up negating about a 10% gain in the stock. Oh well.
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Interesting choice with AA. That is a stock that was under my radar until I saw you mention it here. Are there one or two things in particular that attracted you to it? I'm not familiar with it but will look into it more.
 
SoCal78 said:
skek said:
I know I'm not the only one who is impressed with how fast SoCal has become fluent in the language of stock market trading! Thanks for sharing, and for the record, I made the exact same mistake with AA this month -- didn't buy my covered calls back at a 20%+ gain, and it will end up negating about a 10% gain in the stock. Oh well.
Click to expand...

Interesting choice with AA. That is a stock that was under my radar until I saw you mention it here. Are there one or two things in particular that attracted you to it? I'm not familiar with it but will look into it more.
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Easy my student. One volatile/risky stock at a time. Either BAC or AA.

I gotta calm this girls appetite for risk ;)
 
Good morning, traders!

I decided to cash out with BAC this morning... and I took 143% of my investment with me!! :-) Good 'nuf for me!
 
skek said:
BlackVault CM2 said:
My last two weeks was beyond orgasmic. Made more money than I did last 2-3 years trading.
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Umm, well, I didn't do that well. I made enough money to buy Deuce another ice cream cone...

Kudos, BV, you deserve it for all your time and patience with us on this thread.
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Agreed, I followed BV (not to the extent he was in) on the BAC trade and have made some nice profits.

On a different note, the following can only be characterized as DUMB luck and nothing more. So on Thursday close I SOLD 15 uncovered WFC March $15 puts for $.45 because in my mind I thought WFC would not slip below $14.75/share. Anyhow, I have an interview that went long on Friday and I got back shortly after 1pm back to the computer screen and I saw WFC close at around $14 on Friday so I thought I was out about $800 on the trade. Well I pop open my TD account this morning and low and behold my options were excercised by being 1,500 shares of WFC @ $15/share (plus I collected about $700 for selling the puts). Wow, just wow did I get lucky. So the says is true...it's better to be lucky than good. haha

Btw, I also picked up 20 April $20 SSO calls this morning for $1.20 (this have 20 April $5 Calls for BAC too).
 
skek said:
SoCal78 said:
skek said:
I know I'm not the only one who is impressed with how fast SoCal has become fluent in the language of stock market trading! Thanks for sharing, and for the record, I made the exact same mistake with AA this month -- didn't buy my covered calls back at a 20%+ gain, and it will end up negating about a 10% gain in the stock. Oh well.
Click to expand...

Interesting choice with AA. That is a stock that was under my radar until I saw you mention it here. Are there one or two things in particular that attracted you to it? I'm not familiar with it but will look into it more.
Click to expand...

No particular reason -- I like the materials sector, they tend to have more transparent balance sheets and cash flows. The more complicated the products/services, the more complicated the company's financials. AA is easy to understand. And I don't want to buy bank stocks, except to take advantage of short term trends. Also, at the time, AA was offering an attractive dividend, although it has since been slashed. And, most importantly for a covered call strategy, even though the company's long term prospects are decent, the options carry a pretty good volatility premium.

I'm watching a handful of stocks to see how they behave. AA is one of them. I'm eventually going to do this with a good percentage of my real money, and I can't afford to get it wrong. So, this is a test drive, in a way.

I'm also watching XOM, SLB, PFE, DOW, CAT, T, VZ, among others. Haven't invested in any of those yet, but I'm watching their behavior and studying their businesses.
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Skek, I think the market will drift up into April-June as many companies have slashed their 1Q and 2Q estimates so the chances of them beating are very high (this will be perceived to be very positive by that market and talk will begin that a second half recovery is in the works). Of course that recovery will not come to pass this year and once Sept/Oct come around we will see new lows in the indexs. I'm Bullish short term and Bearish long term.
 
SoCal78 said:
Good morning, traders!

I decided to cash out with BAC this morning... and I took 143% of my investment with me!! :-) Good 'nuf for me!
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Nothing wrong with taking profits. I sold off 1/2 of my April $5 BAC sales on Thursday morning. I was going to buy some May $10 calls for BAC on Friday at close but I didn't get back to my desk until after close. Now I'll wait for a pullback to pick some put.
 
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