In today’s Daily Digest, we’ll review the following:
- No new positions today.
- Adjustment to XME position.
- No exits since the last report.
- Current status of open campaigns.
Let’s dig in!
Expert technical analysis of financial markets by JC Parets
In today’s Daily Digest, we’ll review the following:
Let’s dig in!
When holding long out-of-the-money options, theta is your enemy. This is especially true in the last 2-3 weeks before options expiration. The daily decay in options premium – in percentage terms – increases each day as we get closer to expiration.
As such, one of my Best Practices is to review my portfolio of positions on the first trading day of each month and identify any positions containing long options approaching expiration.
If I am holding any, and these options are out-of-the-money, then the decision is easy: time to close and move on. I’m running out of time, the odds are stacked heavily against me, so I better close and salvage whatever is left of the premium in the trade. If I still like the setup in the stock and want to stay involved, then I’ll look for an entirely new trade to put on.
On the other hand, if I’m holding expiring long options, but they are in-the-money, then in most cases, this is a position that is working for me and I’ll attempt to hold on to it for as long as I can. This is where discretion comes in. I’ll begin placing a “mental stop” somewhere at or near a three-to-five-day low. I’m giving it an opportunity to continue working for me, but I’m tightening the leash.
In today’s Jam Session, I reviewed a couple of current examples of each scenario. I had long June options in $UBER that were out-of-the-money which I had to cut to eliminate the risk of any further losses. However, I’m also holding long in-the-money June calls in $SE that are working and you’ll see how I placed my stop at the preceding 5-day low, which I’ll continue to monitor and adjust daily as we approach expiration.
All this and more here:
Trade ’em Well,
Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research
In today’s Daily Digest, we’ll review the following:
Let’s dig in!
I received a well-meaning question from one of our clients today regarding an open position.
This client missed getting into the trade a couple of months ago.
Paraphrasing her question, she asked, “Since the stock is still above your stop loss level, would it make sense to buy the dip here, and/or would you add to your position here?”
Again, it’s a well-meaning question – one I’m sure we all often wrestle with.
The problem, however, is that the position isn’t acting well. It’s a longer-term trade for us and still has a ways to go until options expiration, but the stock is currently trading well below the level at which we first got in.
In the chart below, you can see where we entered at the purple circle: [Read more…]
Consumer Discretionary stocks are on our radar. And for today’s trade, we’re going abroad and finding a stock that has both a great setup and is also starting to become a fashion “story” here in the U.S.
Just about anyone I’ve talked to about sneakers recently has mentioned this brand. It is quickly becoming a favorite. I don’t currently own a pair, but if this trade pays, then perhaps I’ll go buy a pair with my profits 🙂 [Read more…]
In today’s Daily Digest, we’ll review the following:
Let’s dig in!
In today’s Daily Digest, we’ll review the following:
Let’s dig in!
[Note: We entered this trade on June 4th following the entry trigger. Details below]
On today’s Flow Show, Steve Strazza brought the heat.
It appears Bitcoin is about to start another leg higher. It’s showing all the signs: A tightening consolidation on the verge of an upside resolution. And with the 100,000 level on the watch list of every professional and amateur market speculator, it’s hard to believe that the next bullish breakout does not include a run to and through this highly watched level.
In the meantime, we equities options traders still have limited vehicle choices available to us to participate in this move. We’ve long used Microstrategy $MSTR as a Bitcoin proxy. But our feeling is that if Bitcoin makes the move everyone is waiting for, we will see the entire crypto space go with it, and that will be great news for a stock like Coinbase $COIN.
Here’s where the charts of Bitcoin and $COIN stand now: [Read more…]