What To Focus On - Part Two

My blog of November 27th was entitled "What to Focus On". Please read it. This week we are feeling a bit of a hangover. Last's weeks triple witching event is over. Stocks that were forced to contract in price to sqeeze out spectatate positions on them are now free to resume there old trading patterns. This Monday morning at 10:20 a.m. the Djia is up 301 points. There are also losers. So now what? Mark on your calendar exactly three months down the road how the markets traded on the first morning after one of these triple witching events and use this same logic to catch the upside on the next "hangeover" day like this. How do you pick the winners? Find a few stocks that have enjoyed a recent upswing and play them to pop on the first trading session after one of these events. This blog is just an observation.

Tuesday May 11th. A 473 Point Drop In The D.J.l. In One Day With "Mcdonald's" Options Up and Down

I went into Tuesday with a "McDonalds" "Put" which I sold at 10:04 a.m. I had bought it just before close on the previous day because I liked the chart. First here is it's five day chart followed by a one day chart.
The market tanked on the opening and I didn't wait long to get out At 10:00 a.m. it seemed to be on a rebound. See the chart. I got out once again at 10:04 a.m. Here is the ticket. Like they say, shoot first and ask questions later. The printout is difficult to read but it says out at $5.30 This traded netted me $150.00. I was ok with that.
Everything was down but the day was early. Were the markets oversold? I turned around and played the upside. Sometimes that can be the worst strategy in the world and I did it with two trades.
I liked what I was doing because I was trying to play a morning bounce after a sharp morning decline and my fills on these two trades were at 9:52 a.m and 9:55 a.m..
I got out ten or fifteen minutes later at 10:09 a.m., 4 @ 1.95. I only made a few dollars but I didn't want to hang onto them and see them role over. I was free from that position. Or was I?. At 11:47 a.m. I got the itch again to be back in, this time paying $147.00 each for two contracts, on the same series of "Calls" I just had just got out of at 1.95. At the end the day they closed out a price a touch lower. I can live with that.
Later on in the day when the market started to stop dropping I bought yet another "Mcdonald" 232.50 "Call" at 3:15 p.m., this time with a next's week striking price. I will have eight trading days to sit on it. One of the reasons I like "Mcdonald's" at this point in time is that more people are getting out which should be good for sales and "McDonald's" is not a stock prone to unusual news reports. To be buting in "Calls" on a day the market is crashing hoping for a next day rebound really only make sense after a couple of days of downward markets. let's see what happens.


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