Market Curiosity: Exploring Markets And Systems

January 15, 2013

FB – sell Feb 30 call for > $200 (update 2, Jan 29) -16%

Filed under: -05 to -24%, Short Calls — Tags: — Jeff Fitzmyers @ 11:07 pm

Not selling if the stock opens significantly down. (Could fill the gap and keep going up.)
– Down on volume.
– Short term RSI closing under medium term RSI.

Should at least stall out here.
Stop loss is a close above 32.

+ FarceBook Is Out Of Gas

FB daily jan 15 s013

Update January 16: Filled at $220.

Update January 29: Covered at $256, -16%.

I would not want to be long, but more so, I don’t want to be short right before earnings tomorrow. The reward is not worth the risk.

FB daily jan 29 2013 10.45 pst AM

Update January 31:
Option had a low of $51 and closed at $155.

FB daily Jan 31 2013

February 9, 2011

Love And Options, Nassim Taleb; Options Writing Mistakes To Avoid

Filed under: Just Watching, Short Calls, Short Puts — Tags: — Jeff Fitzmyers @ 10:44 am

Love And Options, Nassim N. Taleb
Why did you find options so attractive?
Because they are nonlinear in their payoffs. They seem to require a lot of complex mathematics, but in reality, we can figure them far more effectively with a diligent use of guts. With some imagination, you can mentally play with their payoff and develop intuition for how they work.

What did you observe?
I noticed that options had a tendency of sucking in very intelligent people and blowing them up. The smarter the person, the more spectacular the blowup.

Options Writing Mistakes To Avoid, James Cordier and Michael Gross
…option selling is becoming a popular choice among high net worth investors and traders. This has been mainly because of the strategy’s high probabilities of success on individual trades, ability to generate reliable income and positive performance in all types of market conditions… Experience shows, however, that not doing the wrong things will have as much, if not more, an impact on your portfolio’s ultimate performance than doing all of the right things. Therefore, we can learn a lot from the errors of others.
– Mistake one: Over-positioning
– Mistake two: Selling too close to the money
– Mistake three: No exit plan

The article also has this nifty chart:

January 24, 2011

Watching CAT channel – now broke out and up +3%, -1%

Filed under: +0 to +5%, -0 to -4%, Long Calls, Short Calls — Tags: , — Jeff Fitzmyers @ 12:00 pm

+ The daily CCI is about to cross above the weekly CCI.
+ The weekly CCI is starting to turn up.
– The daily RSI was recently above 70 and the weekly RSI still is. This is not a momo stock and yet that
+ Still above the up trend line.
+/- The experimental Gann 60 day cycle line is coming due. Will price leave the channel?

Jan 19th: Sold Feb 90 put for $1.16. Bought May 95 calls for $5.95. (I was late to the party.)

+ Pretty good breakout volume.
+ Daily CCI just crossed over weekly CCI.
+ Price did not wait until it went sideways to the up trend line, nor the 34 EMA. An indication of strength?

Jan 19th: Sold at $6.15. +3%. Price stayed near the high for a while but is slipping. If the market keeps going down, odds are CAT will at least drop back into it’s channel. Can always get back in. Keeping the puts for now.

Jan 24: Covered the call at $1.15. -1%. Just don’t want the exposure right now.
– And the retest of the channel turned out to retest the bottom channel. Not ideal, and now’s the time to take profits too soon.
– I wonder if price just does not launch to the downside. Actually, because of all the support with the 34 EMA, cannel bottom and big candle up (so far today), if price closes below 92, that would be a big sell signal.

January 19, 2011

Sold CXW calls: Will states pay for pot smokers to be jailed? -36%

Filed under: -25 to -49%, Mistakes, Short Calls — Tags: — Jeff Fitzmyers @ 10:32 am

I have read the US has more people in jail than any other nation and that each inmate costs about $20,000 per year. Apparently about 12% of them are for pot. I wonder how much people will care to continue with that??

Sold Feb 25 calls for $0.70. I did not sell short the shares since this is really not the environment to do so. But since upside seems limited selling calls should work out over the long term.

– 1.24 billion in debt, 34 million in cash.
– Both institutions and insiders are selling shares.
– Monthly, weekly, and daily CCI’s are heading down.
– Below 34 EMA.
– 6 distribution days since December.
+ In a wedge, but speculate price will drop out instead of rise up.

Jan 19th: This is turing into a mistake. If things don’t quickly reverse today, it’s time to keep a small mistake from becoming a big mistake.

Was looking for a drop like this:

Jan 19th: Covered the calls for $1.10 -36% I guess I should have waited a bit more. I am okay with this trade: I cut a potential loss short. One of the worst things to do is let a small loss become a big loss. I did manage to get out near the high though 😉 Now back to watch and wait mode.

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