Stock Options

[gojo]

Some might wonder how can you make money in an Stock Option that expires in one day.
Here's how I do it.

I monitor over 100 stocks. About 30 to 45 minutes before the market closes. I look for a stock that probably will be up at opening. I use Candle Stick Charts, that will be closing on the on the positive side (bullish engulfing), a major reversal pattern.
Yesterday 12/17/14, 5 minutes before close, bot 10, 52.50 Calls, @ $0.42 Total price + commission = $439.50.
This morning 7 minutes after market opens (8:37 central), sold at limit order for $0.81 = $810.00 -$19.50 commission = $790.50..

790.50 - 439.50 = $351.00 PROFIT!

So, this is how you trade Weekly Options.

Money made, now I can go and take my morning walk with a SMILE.https://vanlivingforum.com/images/smilies/rolleyes.gif

---

Some might wonder how can you make money in an Stock Option that expires in one day.
Here's how I do it.

I monitor over 100 stocks. About 30 to 45 minutes before the market closes. I look for a stock that probably will be up at opening. I use Candle Stick Charts, that will be closing on the on the positive side (bullish engulfing), a major reversal pattern.
Yesterday 12/17/14, 5 minutes before close, bot 10, 52.50 Calls, @ $0.42 Total price + commission = $439.50.
This morning 7 minutes after market opens (8:37 central), sold at limit order for $0.81 = $810.00 -$19.50 commission = $790.50..

The ticker was (C) Citigroup Inc.

790.50 - 439.50 = $351.00 PROFIT!

So, this is how you trade Weekly Options.

Money made, now I can go and take my morning walk with a SMILE.https://vanlivingforum.com/images/smilies/rolleyes.gif

 

[HarmonicaBruce]

In September, I bought some GERN for $2.20. Then I sold a $3 call for .24. Well, the call expired and my stock got "assigned" over the week-end. I made $84 on a $196 investment in about 3 months (per 100 shares). But guess what? It's back down under $3! I'll wait for it to go back down to under $2.50 (if it does), and try it again.

I'm waiting for my UCO (crude oil) option to expire on Jan 17. I'm thinking my UCO will get assigned ($12 strike), but I'll clear about $170 on a $1030 investment in about a month. I'll lose money if oil keeps going down, but I don't think it will.

 

[gojo]

In September, I bought some GERN for $2.20. Then I sold a $3 call for .24. Well, the call expired and my stock got "assigned" over the week-end. I made $84 on a $196 investment in about 3 months (per 100 shares). But guess what? It's back down under $3! I'll wait for it to go back down to under $2.50 (if it does), and try it again.

I'm waiting for my UCO (crude oil) option to expire on Jan 17. I'm thinking my UCO will get assigned ($12 strike), but I'll clear about $170 on a $1030 investment in about a month. I'll lose money if oil keeps going down, but I don't think it will.

When filing taxes on your covered calls, do you have to fill out a work sheet ( schedule D , form 1041 ) or does your broker have a print out sheet? Texas doesn't have to worry about state income tax, but we make up for it on property taxes.

 

[HarmonicaBruce]

When filing taxes on your covered calls, do you have to fill out a work sheet ( schedule D , form 1041 ) ...

I'm trading my IRA so I don't have to file. But, I'd think you'd need to fill out a schedule D. For covered calls, the cost basis would be zero. My account shows a sale just like if I had placed an order when my shares get assigned.

 

[gojo]

Just bot 10 GDX Feb.6, 2015 , 22.50, 8.57 central
I paid $0.15 X 10 contracts plus commission @ $169.50

I threw a dart on this one, it's way out of the money. Tomorrow is the last trading day.

 

[gojo]

Just bot 10 GDX Feb.6, 2015 , 22.50, 8.57 central
I paid $0.15 X 10 contracts plus commission @ $169.50

I threw a dart on this one, it's way out of the money. Tomorrow is the last trading day.

Just sold @ 10.00:17 limit order
I put a sell @ .25 and got at this time. I always speak of my profits but never show my trades as I go. I decided to do it live this time.

Here goes:

This includes commission . sold @ 230.49, bot @ 169.50, total profit @ $60.99, 
Just prove, that you can start with little money and work yourself up. 60.99 doesn't seem like much, does it. BUT, that's a profit of 35.9%... and that's just a hair over an hour. I don't consider myself smart, so I think any body can do this...

 

[HarmonicaBruce]

Just sold @ 10.00:17 limit order
I put a sell @ .25 and got at this time.

So your stock program picks option candidates for you?  

 

[gojo]

I can only explain the basics, because it's to much to there. I subscribe to http://www.stockcharts.com
For weekly stock option, I like to use the live intraday charts. For this type of trading I like volatile stocks that moves 2 or more points a day. Also like options that has 1/2 points instead of just whole points. Now if I owned a stock and wrote options on it, then I would want a less volatile stock. Weekly options started trading 2010 and it's getting very popular. I was going to post the chart I used, but everything is disabled.

 

[gojo]

This is the chart and indicators I used. It's a intraday chart. GDX

 

[Bdog1]

There's ETFs that follow the GDX, with a 3:1 leverage. Long is NUGT. Short is DUST. There some of my favorites.

 

[gojo]

There's ETFs that follow the GDX, with a 3:1 leverage. Long is NUGT. Short is DUST.  There some of my favorites.

I'll have to put them on my list. I do trade FAS & FAZ. FAS is one my favorites.

 

[gojo]

I'll have to put them on my list. I do trade FAS & FAZ. FAS is one my favorites.

NUGT and GDX had similar downward move this morning same time. Compare to price and call options price. NUGT   17.81 vs 18.50 call and GDX   22.07 vs 22.50 call.
NUGT from low to high = 110% move,  GDX from low to high = 141% move..

 

[HarmonicaBruce]

Just bot 10 GDX Feb.6, 2015 , 22.50, 8.57 central
I paid $0.15 X 10 contracts plus commission @ $169.50

I threw a dart on this one, it's way out of the money. Tomorrow is the last trading day.

So that call is now worth zero (GDX is down 5%).  Did you get out before it dropped?

By the way, UCO is up 5% today.  So I'm in the black, and getting blacker!

 

[gojo]

So that call is now worth zero (GDX is down 5%).  Did you get out before it dropped?

By the way, UCO is up 5% today.  So I'm in the black, and getting blacker!

Yes, I made 35.9% profit.

 

[gojo]

Yes, I made 35.9% profit.

On Feb.5 GDX opened down. At opening, I put a limit order to buy 10 GDX CALLS at $0.15., received it in about 15 minutes. Soon as I received it, I put a limit order to sell 10 GDX  CALLS at $0.25.  Just wanted to prove how quick and easy it is to make money. I stated that I bot and sold in a little over an hour on my earlier post. But my confirmation shows that I own it for only 47 minutes.
If I would have bot over 50 contracts, I could of made over $1000 in 47 minutes.
On the intraday chart I circled where I bot and sold. Now if I would have bot a strangle, today I would have made money on my put.

 

[gojo]

Today I been watching CRM. A Symmetrical Triangle is in order, I have it marked on the chart. I like its' option because it has 1/2 strike prices. If it opens up tomorrow, might buy a put option. I like 57.50 PUT strike price because todays range .36-.65 a 81% move, closed @ .65...BUT I'll have my eyes more on 57.00 PUT strike price, because it closed @ .37. Days range were .29-.37 a 28% move. Let it get near or in the money and it will take off.
If CRM opens up, it probably will go down to .20-.25, I won't pay no more than that.

http://www.incrediblecharts.com

 

[gojo]

Today I been watching CRM. A Symmetrical Triangle is in order, I have it marked on the chart. I like its' option because it has 1/2 strike prices. If it opens up tomorrow, might buy a put option. I like 57.50 PUT strike price because todays range .36-.65 a 81% move, closed @ .65...BUT I'll have my eyes more on 57.00 PUT strike price, because it closed @ .37. Days range were .29-.37 a 28% move. Let it get near or in the money and it will take off.
If CRM opens up, it probably will go down to .20-.25, I won't pay no more than that.

http://www.incrediblecharts.com

I got it @ .21.

 

[HarmonicaBruce]

I got it @ .21.

So let me see if I'm following.  You'll be in the money if CRM goes below 57.50 by Friday, am I right?  

Good luck!

 

[HarmonicaBruce]

Lately I've been selling UCO covered calls.  It's been working out great, I think I'll have no problem clearing 20% in 2015, but time will tell.  Basically, I sell a call that's about 2 months out, then wait for the decay as the expiration date approaches.  I sold some $12 calls for UCO on December 26 for $1.17.  UCO is $8.75 now, and those calls are trading at "bid 0, ask .15".  I'd like to sell more calls, but I don't want to pay .15 when in 2 weeks the calls will expire.  So, this morning I put in an order to buy my calls back at .05.  And guess what?  It executed!   Right now I can sell a $9 april 17 call for $1.20, which means I'm making 15% in just over 2 months.  But, UCO is down 7% today.  The time to sell covered calls is when the stock is up.  I'll bet it's back up over $9 this week, so I'll wait to sell the calls.

I have no idea why it's this easy to make money in options.  And what's my risk?  3 months ago I bought UCO for $12, it's under $9 now, and I'm just about even.  We're not talking about a company that can go broke like so many have, we're talking about crude oil, which is very cheap right now, and I believe MUST go back up.

So today I learned that when the "bid" price of one of my covered calls is zero, try to sell it for 5 cents.  The worst that can happen is the order doesn't go through.  My broker, Fidelity, won't let me trade an option for less than 5 cents, so I have to pay at least 5 cents.  So instead of making $1.17 from Dec 26 to Feb 20, 56 days, I made $1.12 in 46 days.  And I'll do it all over again.

Good luck to all!

 

[gojo]

By looking at UCO chart, I see why you're making money. Selling Covered CALLS is like buying insurance. I will say one thing you're doing it right. Most people don't know, that's the way to cover your losses.

It looks as if it might of hit bottom. On the chart's indicators, PPO & ADX lines are starting to meet. They call that a squeeze.