$SPY #Options #DayTrade – recent tweets

THE DAY-TRADING DAZZLE OF BUYING OPTIONS UPDATED

FIRST PUT TRADE

SECOND PUT TRADE

This chart is set to display return per $1K in play in the white flag or horizontal line on the right axis (the #1Kdaytrade on Twitter), and the #10Ktrade in dollars in the green flag or horizontal line on the right axis, which also makes for easy percentage calculations.

THE TRADING STRATEGY

There are so many options strategies in the stock market the head spins — a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

But buying options…

Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen — the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game, like everyone in options trading says?

For day traders it doesn’t have to be. If the trader is persistent, discipline and experience, it almost never is.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for day-trade scalping with the weekly calls and puts on various liquid stocks. Must be stressed the key to trading the weekly stock option is liquidity in order to avoid spreads too wide to turn around a profit during a single day.

One last note: again, the key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable taking.

$SPY #Options – #DayTrading puts as the market plummets

For twelve days the major market leaders defied the falling long-term breadth, measured by the McClellan Summation index (the all-important NYSI) dragging the general market high and higher on FED intervention (I guess) and irrational exuberance for the big, big tech stocks.

Well, today, the NYSI 13th day down, took care of that. Across the board, the indexes and stocks plummeted. The Dow was down 800 points, the Nasdaq Composite down 598. High flyers AAPL down 13%, TSLA down 14%, NVDA 13%, ZM down 14%. A lot of shock going around as exuberance gave to way how can this happen? Aren’t these stock things supposed to go up every day?

Funny.

Anyway, it was great day for day trading SPY puts:

The strategy for taking these trades is stated in this link: #DayTrading $SPY #Options – Buying calls and puts.

FIRST TRADE: 320%.

SECOND TRADE: SOME ICING ON THE DAY

#DayTrading $SPY #Options – after seven days up, SPY gets put

As SPY tried to gap into an 8th day up in a row, it was obvious any fall back through the open was trigger to buy the puts.

FIRST TRADE:

SECOND TRADE ENTRY:

SECOND TRADE CLOSE:

(CLICK ON CHART FOR A LARGER VIEW)

#DayTrading $SPY #Options – Buying calls and puts

The contents of this post appeared here last on June 11th. I’m lifting it intact because nothing ever changes in the strategy.

There are so many options strategies in the stock market the head spins – a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

But buying options…

Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen – the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game, like everyone in options trading says?

For day traders
it doesn’t have to be. If the trader is persistent, disciplined and experienced, it almost never is.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for scalping on any time frame intraday.

Again, the key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable taking.

$UVXY – lighting a fuse for its next explosion…

File this under “history repeating slash history rhyming.”

The last time I posted a VIX ETF heads up was January 14TH ($TVIX – Just a heads up…), when TVIX was 40ish and UVXY was 10 something. Both, at the time of that post, were down eight days in a row in a falling wedge pattern, like UVXY is now (see the chart below).

I suggested at that time that whatever buy trigger came along it was going to come along soon and those leveraged ETFs were going to explode.

Three days later they popped nicely, not spectacularly but nicely, then backed off to retest the lows into early February. Then there was a another buy, triggered by a down turn in the NYSI, the longer-term breadth measure of the McClellan Oscillator, on February 19th.

And the VIX ETFs exploded.

UVXY went from under 11 to as high as 135. In two weeks. TVIX, which rocketed from 40 to a 1000, is no longer with us, having killed itself with success…well, extreme volatility.

The blast was driven by the onset of the Covid-19 pandemic in the United States. It started slow but with President Trump’s incompetence and his totally botching of this country’s response to the virus (calling it a “hoax”), it ran the major indexes down 36% in a few weeks.

The market has rallied back to the previous highs with Congress putting out a two-trillion-dollar stimulus that once again helped Wall Street but not much on Main Street, and with the Federal Reserve throwing money onto the market like gasoline on a bonfire.

Truly, it has been a market rally led by tech and irrational exuberance. Remarkably, the banks have been relative laggards in the rally, never a good sign for the market longer term.

So what now?

As yet, the market has not come to terms with how severely the economy has been damaged with double-digit unemployment, with a possible waves of evictions, with thirty/forty million people out of work, with relative consumer buying power in the shitter, with small businesses failing all over the place (YELP predicts sixty percent of restaurants will not recover). And now schools likely will not be able to fully open.

Even now the Trump Administration doesn’t have the slightest idea what to do, and Republican Senators are dickering with each other, holding up the Democratic rescue plan. Trump has returned to the coronavirus briefing podium to spout his lies and ignorance. Trump’s big botch goes on while the rest of the world has shown to varying degrees what should have been done.

Five million Americans have been infected and 170,000 have died (with both those numbers still rising fast). As the rest of the world continues to make progress against the pandemic (New Zealand has not had a new case now for 100 days), the United States, governed by not much more than an orangutan, continues to be a mind-boggling catastrophe.

What now? What now?!

This is just another heads up…like last time:

Watch UVXY. It will tell, and there will be money to be made there. It’s setting up another explosion. After these eight days down in a row it could come tomorrow or two weeks from now but it’s likely the fuse has been lit.

(click on the chart for a larger view)

$SPY #Options – #DayTrading calls on a FED day

The Federal Reserve announced its actions Wednesday in what was going be a foregone conclusion – nothing new, more to come.

So call that bullish.

CLOSING FIRST HALF:

CLOSING DAY TRADE:

$SPY #Options – #DayTrade on call Monday

The option day-trade play was the at-the-money 321 call for a 53% profit on one half and a 170% profit on the second half.

See tweets below for time stamps.

TRADING STRATEGY:

Buying SPY Puts And Calls

PROFITS ON HALF:

END OF THE DAY TRADE:

(Click on chart for a larger view)

#MarketTiming three tweets today from a yawn to the scream

THE YAWN TO THE SCREAM

END OF THE DAY

(CLICK ON THE CHARTS FOR A LARGER VIEW)

$SPY #Options – #DayTrading a day to “put” on the record

A day in the SPY 317 put, expiring Friday, 7/10.

FIRST TRADE HALF UP 53%:

EXIT SECOND HALF OFF 230%:

SECOND TRADE ENTRY:

FINAL EXIT HALF UP25%, SECOND HALF 12%: