NFLX’s weekly in-the-money 360 call today rose 213% on its buy signal near the open.
As a result it drove the four stocks in a day-trading basket tracked here – AAPL FB, NFLX, TSLA – to an overall gain of 66.9% for the day.
This is a system that simply day trades the stocks’ weely calls and/or puts on the long side. As per this link:
#DayTrading Stock Options in the Fool’s Game
I’ve been setting the trades at a total of $10K per day — what I call the $10Kdaytrade on Twitter — allocating $2,500 to each of the four stocks. So today that was $6,690 for the $10K committed to the trade. Besides the spectacular NFLX move, the FB call was up 90% with $2,261 gain, the AAPL call was up $442, TSLA was up $415; there were also triggered trades in NFLX, AAPL and TSLA puts with small losses except for TSLA down $968.
I began applying the day-trading buy and sell triggers similar to those I use for day trades in SPY options on February 26th, about a month ago, trading the nearest weekly strike in the current week, and first introduced it here February 27th:
The system has been volatile (there were 20% and 30% losers on separate days last week) but so far so good overall. It is up 124% on $10K trades opened and closed each day.
So far this is just an experiment to see if day trading options on very liquid and popular stocks is viable. It is an attempt by going long on either the call or the put or sometimes both during the day to eliminate or at least mitigate the “greeks”, the complexity of fills on strategies like iron condors, and the margin requirements needed to short options. Obviously, this is not for those with their own trading rooms nor for hedgers, but for day traders with limited funds to trade, it suggests there are simpler ways to play the options game.
For an illustration of today’s movement in the calls in the stock basket discussed above see the charts below.