Sunday, September 28, 2008
Update on October Open Trades Expiring in 17 days
The markets continue to be very volatile and challenging to trade. This month we have been trading a solar company stock that is very Bullish due to favorable legislation passed earlier this month. These Bull Put trades are retuning 8% to 9%. Next week we will complete an Iron Condor returning 15%. I rarely trade stocks but this month an excellent trading opportunity occurred that was hard to pass on. At least we are making a positive return while the market decides what direction to take. This financial crisis and how the US plans to stop the failure of more firms is keeping investors on edge.
Sunday, September 21, 2008
September Trades Expired Friday 9/19/2008
The past 2 weeks have been very challenging. With the market clasping quickly. We had to close all our NDX and QQQQ Bull Put credit spreads for a loss. Our QQQQ hedge was closed to early for $5 a contract instead of $15 a contract if sold during the last week of expiration. Subscription fees will be refunded next week.
New Trades Expiring in October will be emailed later today and earl next week.
Hedging
We are going to hedging (buying calls and puts) on both sides of our Iron Condors from now on. The best time to put on a hedge is when you get a tip off that the market is ready to get worse or better. This is not easy to do but is practiced buy a lot option traders. I like buying FOTM call and put options that cost $2-$3 per contract like we did this month. Subscribers who held off selling their qqqq to this week recovered a portion of their loss from selling the NDX Bull Put credit spreads. The key is to invest 10% to 30% of your collected credits in these FOTM call and put options. This is just like buying insurance.
Close Strategy
There were a few subscribers who brought back their short NDX put options first. When they sold their long options they were able to cover the cost of closing their short options and prevent a loss. This was one of the adjustment options I posted on the members page for the NDX 1725/1700 Bull Put trade. In order to implement this strategy you must have trading capital available to pay for the short options.
New Trades Expiring in October will be emailed later today and earl next week.
Hedging
We are going to hedging (buying calls and puts) on both sides of our Iron Condors from now on. The best time to put on a hedge is when you get a tip off that the market is ready to get worse or better. This is not easy to do but is practiced buy a lot option traders. I like buying FOTM call and put options that cost $2-$3 per contract like we did this month. Subscribers who held off selling their qqqq to this week recovered a portion of their loss from selling the NDX Bull Put credit spreads. The key is to invest 10% to 30% of your collected credits in these FOTM call and put options. This is just like buying insurance.
Close Strategy
There were a few subscribers who brought back their short NDX put options first. When they sold their long options they were able to cover the cost of closing their short options and prevent a loss. This was one of the adjustment options I posted on the members page for the NDX 1725/1700 Bull Put trade. In order to implement this strategy you must have trading capital available to pay for the short options.
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