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One Week Options. Are They A Good Bet In Times like This?

Look at how these these four stocks traded last week. 1) What a great week for one week Call option players on Boeing even though the stock ended up down .83 cents on the week. 2) Roku. Roku hasn't yet recovered from a not so good quarterly report. Roku lost $1.13 on the week. (Netflix in somewhat the same space was up $35.780.) 3) Disney suprised. I talked about that in a recent blog. 4) Now Caterpillar. It was up $12.83 Now The D.J.I. was down .11% or basically flat. In good times Call options can be your best friend. To be continued. Here is how Roku traded on the day.

An Introduction

Online trading accounts. Some people call them a gift from the Gods! Instant access to a world of near endless trading opportunities. Seamless executions with one click of a mouse.

It's 2:30 p.m. on a Wednesday afternoon and the stock “Caterpillar” is down $2.15 on the day and up 30 cents in the last ten minutes. The DJI was down nearly 200 points around 11:30 a.m. and has now rallied back to being down only 40 points. Many stocks seem to be rebounding from their lows of the day. Would this be a good time to purchase a slightly "out of the money" Call option on "Caterpillar" which expires on Friday with the hopes that this upward directional movement will continue over the next twenty or thirty minute time period? That’s the length of time it might take for a Call option priced at $185.00 to jump up to $250.00 or beyond. After you deduct the costs of commissions you would still be left with a profit of $40.00 or so. Do that a couple of times a day. Not bad for observing a short term price swing.

You do not have to be a “Rhodes Island Scholar” to be part of this world. You are not going to lose your house to the bank if your early days trading create losses of $250.00, $450.00 or $650.00. It is more about using the knowledge gained from previous trades to evaluate the risks involved in doing your next trade. It is learning how to protect yourself from taking unnecessary risks like holding onto random options positions over the weekend when who knows what might happen. It's also about learning how to read to your intuitions.

My name is Peter and many moons ago I did a short gig as a “Merrill Lynch” stockbroker. I now work in an unrelated profession, but I still have a passion for day trading Call options (betting on stocks to go up) and Put options (betting on stocks to go down). Well hold on, betting is not the correct word. Nor or are the words speculating, hoping or praying. Perhaps a better word is anticipating. Anticipating individual stocks to make short term directional moves upwards or downwards.

I have designed this site to show people the types of trades I make and why I do them. Sometimes I win, sometimes I lose. I mostly do small dollar amount trades and there are times on some Fridays when I do multiple trades. I like Fridays for trading Call and Put options the best on options that expire that day because that is the day of the week you can get the most bang for your buck if you correctly anticipate which way an individual stock is going to move. One of my favourite stocks to trade options on is “Caterpillar” because daily swings of two or three dollars is often the norm and it is a stock void of most chatter.

There are times when I will take a week off from trading, knowing I will be not be handicapped when I return to the action. The world of option trading always offers trading opportunities. Without any further introductions let me share with you some of my most recent trading experiences.

I offer no promise of instant successes and I do not encourage you to do what I do. I just think that people in general will benefit from being exposed to platforms like this. Cheers.


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