TheWalkmen
Footballguy
This is exactly what I'm trying to do. I'm exploring different ways to deliver consistent profits, and trying to come up with the best way(s)!
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My Stock Value Strategy Starts Now (1 Viewer)
- Thread starter David Dodds
- Start date
KGB
Footballguy
Wow. Good timesACLS up 39% today...
siffoin
Footballguy
Walkman:
So when expecting a quick move of the underlying...what you want to ascertain is which strike to buy. Which will give me the most band for my buck.
Let's say I think the DIA is going to drop $1 (100pt move on the DOW). I'm not concerned about premium burn because I'm expecting this move to occur quickly. Here's how I work it up...
I input the bid/ask of all nearby strikes.
Then I determine what I can expect the loss to be if the underlying (1st) moves against my position...then what I can expect the gain to be if the underlying moves in my favor. I can then determine a Risk/Reward Ratio.
DIA Put with One Strike Move
Strike - Bid- Ask- Mid-Pt- Loss- % Loss- Gain- % Gain- R/R Ratio-
97 0.61 0.63 0.62
98 0.83 0.84 0.84 0.22 -25.75% 0.30 35.33% 1.37
99 1.12 1.14 1.13 0.30 -26.11% 0.41 36.28% 1.39
100 1.53 1.55 1.54 0.41 -26.62% 0.52 33.77% 1.27
101 2.05 2.07 2.06 0.52 -25.24% 0.66 31.80% 1.26
102 2.68 2.75 2.72 0.66 -24.13% 0.76 27.99% 1.16
103 3.4 3.55 3.48 0.76
In this example...the best strike to purchase would be the 99...which offers the most bang for the buck.
So when expecting a quick move of the underlying...what you want to ascertain is which strike to buy. Which will give me the most band for my buck.
Let's say I think the DIA is going to drop $1 (100pt move on the DOW). I'm not concerned about premium burn because I'm expecting this move to occur quickly. Here's how I work it up...
I input the bid/ask of all nearby strikes.
Then I determine what I can expect the loss to be if the underlying (1st) moves against my position...then what I can expect the gain to be if the underlying moves in my favor. I can then determine a Risk/Reward Ratio.
DIA Put with One Strike Move
Strike - Bid- Ask- Mid-Pt- Loss- % Loss- Gain- % Gain- R/R Ratio-
97 0.61 0.63 0.62
98 0.83 0.84 0.84 0.22 -25.75% 0.30 35.33% 1.37
99 1.12 1.14 1.13 0.30 -26.11% 0.41 36.28% 1.39
100 1.53 1.55 1.54 0.41 -26.62% 0.52 33.77% 1.27
101 2.05 2.07 2.06 0.52 -25.24% 0.66 31.80% 1.26
102 2.68 2.75 2.72 0.66 -24.13% 0.76 27.99% 1.16
103 3.4 3.55 3.48 0.76
In this example...the best strike to purchase would be the 99...which offers the most bang for the buck.
TheWalkmen
Footballguy
Ok, I think I see the 1.39 R/R Ratio is 36.28% divided by -26.11%. It looks like the .41 is 1.54 minus 1.13 and the .30 is 1.13 minus .83. Then the 36.28% gain is (1.54 - 1.13)/1.13 and the 26.11% loss is (.83 - 1.13)/1.13? I think I have the math right, but can you explain the logic in a little more detail? Also, I assume you prefer this to shorting due to the return on investment potential being greater with puts? like this: www.m-x.ca/f_publications_en/options_strat5_en.pdfBTW, thanks, this is a good lesson.
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Ripley
Footballguy
this made a nice jump today. I got in on this at $1.25. Thanks
Is this still a good bet to go up too $2.50ish?
bigfishboy
Footballguy
And crashing today, did you get out?
TheWalkmen
Footballguy
No, I'm probably going to hold for a while.bigfishboy said:
None_More_Black
Footballguy
If you want to make a short term bet you are better off buying the option as you will have more leverage and a fixed loss if things don't work out. Which option to buy can be a tough decision as out of the money options are cheaper but the don't move as much (smaller delta). Here is a link to find all major option quotes including the "greeks". Just search by stock symbol.Option QuotesTheWalkmen said:
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I'm with you, GB. Where you thinking of selling at today? It's up over 25 in pre-market, well now a little under. I'm thinking of selling half at open and holding out for high 25s on the other half.
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parasaurolophus
Footballguy
Hope PRGN continues to move today.
Mose
Footballguy
I dropped mine at $25 even this morning, and then it went up, but is now back down.Good luck if you keep holding.
Mose
Footballguy
This thing moves dramatically. If someone was real good, they could day trade this thing and make tons.
Mose
Footballguy
Tomorrow is earnings! Fasten your seatbelt.
parasaurolophus
Footballguy
what are your expectations?Tomorrow is earnings! Fasten your seatbelt.
Mose
Footballguy
I think PRGN will be near $4.75 by close tomorrow. I might sell then. I am torn if I am holding through earnings or not.what are your expectations?Tomorrow is earnings! Fasten your seatbelt.
David Dodds
Administrator
With the NASDAQ up early in the pre-market, I opted to cancel all my sell orders of PRGN. Holding 15,000 shares and loving this movement.
Boulder Toads
Footballguy
Getting some decent movement and volume (relative to recent days) on PRGN today ...
NYG Endzone
Footballguy
Holding through earnings?
I swear, FUQI is the devil stock. You don't know how many times over the past few weeks it has gotten within a nickel of my sell price and then shot down a few dollars. And every time I put a buy order in, it shoots down. I just want to get out of this and never see this stock again.
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NYG Endzone
Footballguy
PRGN has beat earnings rather consistently. Is this already factored into its current price?
TheWalkmen
Footballguy
Okay, so when Siffoin said "Then I determine what I can expect the loss to be if the underlying (1st) moves against my position...then what I can expect the gain to be if the underlying moves in my favor." - he is able to determine the loss or gain based on delta? The being able to determine part is where I'm thrown off, but I think I'm close to getting it. Thanks.
Im betting on the news that DRYS offering $9 per share to buy them out.That would help their earnings a ton and not cost them much.
The Z Machine
Footballguy
Noob question: If this does come to pass, what would the price of PRGN do if they agree to merge at $9/share? Doe it just jump to $9, or do the PRGN shareholders get $9 worth of DRYS stock or something?
David Dodds
Administrator
I doubt I will hold through earnings. I likely will start selling shares if/when this goes above $4.40 now
David Dodds
Administrator
Baltic Supramax 1,917 (+1.54%)
Baltic Handysize 891 (+0.68%)
Baltic Dry 3,480 (+2.56%)
Baltic Capesize 5,764 (+3.24%)
Baltic Panamax 3,612 (+1.57%)
The Baltic Indexes continue to surge. I now need at least $4.40 for my PRGN stock.
Baltic Handysize 891 (+0.68%)
Baltic Dry 3,480 (+2.56%)
Baltic Capesize 5,764 (+3.24%)
Baltic Panamax 3,612 (+1.57%)
The Baltic Indexes continue to surge. I now need at least $4.40 for my PRGN stock.
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Hopefully it only hits $4.39 today, I dont want to see you miss out on an additional $15,000 by Wednesday.
siffoin
Footballguy
It sucks. Perhaps part of the issue here is that not so long ago FUQI was about a $3.00 stock. In the past 7 months are so it has a run of a 10x gain. Thinking it will continue in such a surging pattern is akin to thinking the real estate market will continue to make 20% gains per year back in 2005. What I'm saying is that at some point FUQI was/is due for a pullback....and perhaps that day of reckoning is now.I pulled up a daily chart and noticed that FUQI had flipped from a Buy signal (which began on 4/1) to a Sell as of 10/28 with the price at $19.26.It's up $2.00 from that point but the surge on the open today didn't even put a dent into this current trend - though the day is not over. Trading above $22.75 I'd call it a hold. Below it remains a sell. It becomes a buy above $26.Not sure of your position or how you want to manage yourself out or if you even d
ne thought is that you could write a covered call. Let's say you wanted to sell at $23. You could write the Dec 20 call for $3.00. And on Dec exp. FUQI is trading above $20...your stock will be taken. So you lock in the sell price at $23. Your risk is that FUQI runs far above $23 and you miss on those gains...the reward is that it closes just below $20 and you keep the stock and the premium collected ($3.00) on the written call. You could then write the March for another $3.00-$4.00)...thereby lowering your cost basis. (Other options would be writing the 22.50 call for an out price of $24.30 or the 24 call for an out price of $25.25 - though you'd collect less on the premium the odds would be greater that you get to keep your stock)When you get underwater on a position you really have to begin to use your imagination on how you want to manage it. Losses are part of the game...you can either accept that and get out or you work the position. Neither scenario is pleasant. Key here is to move on and forward from losers. Holding a losing position setups a loser mentality. Both losing and winning can become contagious...once you have a loser you need to turn it around ASAP. Every trader suffers losses. Good.great ones never let a losing streak become contagious.
The Ref
Footballguy
Yup. But it is interesting to note (even though some are reporting this) that the USD didn't make a new low. It got right to it and started to rally.A far as I can tell the USD is stuck between 74.90 and 76.60. If this pig craters below 74.90 who know how low this will go and how far the market and comodities will go as a result (and by the way, inflation). But I'm not 100% sold untill the USD falls though 74.90.
siffoin
Footballguy
$1.61 now. Moving above $1.50 was really important. Let's hope they are caching the very best of the ore right now. IF it were to break above $2.00...$2.50 is in the bag.this made a nice jump today. I got in on this at $1.25. Thanks
TheWalkmen
Footballguy
Well, it seems like there isn't much interest in options trading in here, so if this is just cluttering up the thread let me know.
Does this trade seem likely to produce a profit?
Stock symbol ABT, which is currently at $52.31.
Buy the Nov $47.50 Call at $4.70, Sell the Nov $50.00 call at $2.45:
Strike Symbol Last Chg Bid Ask Vol Open Int
47.50 ABTKW.X 4.60 0.60 4.50 4.90 3 12,984
49.00 ABTKC.X 3.35 0.75 3.30 3.50 340 5,228
50.00 ABTKJ.X 2.45 0.75 2.40 2.50 620 10,306
Does this trade seem likely to produce a profit?
Stock symbol ABT, which is currently at $52.31.
Buy the Nov $47.50 Call at $4.70, Sell the Nov $50.00 call at $2.45:
Strike Symbol Last Chg Bid Ask Vol Open Int
47.50 ABTKW.X 4.60 0.60 4.50 4.90 3 12,984
49.00 ABTKC.X 3.35 0.75 3.30 3.50 340 5,228
50.00 ABTKJ.X 2.45 0.75 2.40 2.50 620 10,306
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parasaurolophus
Footballguy
yeah I cant find this.
Sorry, this is what Im hoping happens. I havent read any buyout news.
siffoin
Footballguy
DUDE!You want to purchase a vertical spread that will cost $2.25...and in the best case scenario will make only $2.50. Does that make any sense at all...risking $2.25 in order to make $.25?
The Ref
Footballguy
TheWalkmen
Footballguy
Well, if I am pretty sure ABT stays above $50, then it seems like a decent trade.
parasaurolophus
Footballguy
yeah, that needs to be stated right away.
The Ref
Footballguy
Moatloads
"Mansion" v2
parasaurolophus
Footballguy
$4.52 printed after hours.
