$SPY #Options – Day trading calls 11/01

INITIAL ENTRY:

FIRST PROFITS:

FINAL PROFITS – CLOSE OF DAY TRADE

(CLICK ON CHART FOR LARGER VIEW)

$SPY #Options – day trading calls 10/15

The market context for these trades is outlined in this post – #MarketTiming – the NYMO low above a low. It is in place.

ENTRY:

FIRST HALF PROFITS:

CLOSE OF TRADE:

All Twitter time stamps are Pacific time.

PLEASE NOTE: None of the entries in this blog should ever be construed as investment advice or trading recommendations. They are presented solely for entertainment and educational purposes, and to record trading activities for my own personal trading journal.

$SPY #Options – day trading calls 10/11

These trades are based on this strategy:

#Options – Buying Calls and Puts

And this context:

#MarketTiming – the NYMO low above a low

INITIAL ENTRY:

FIRST HALF PLUS 50%:

SECOND HALF CLOSE OF THE TRADE PLUS 46%:

All Twitter timestamps are Pacific time:

#MarketTiming – the NYMO low above a low

One of the signs of a true bull market is the follow through off a low-above-a-low pattern in short-term breadth (the NYMO).

The signal is displayed in the top portion of the chart below.

It is buy signal for aggressive traders looking for a rally to begin off a meaningful market bottom. In bull markets, it almost always has follow through to the upside immediately. That hasn’t quite happened in recent months, which has made everything in the current market psychology suspect. See August on the chart as an example.

But it did happen today — after triggering yesterday for today’s open, there was the immediate follow through to the upside.

Now the bulls need long-term breadth (the NYSI) to turn up in the next day or two, which is the trending signal. The NYSI is the smoothed line in the middle of the chart below. It is still falling but…

If both breadth indicators get in line, there is a good chance the market rallies strongly, possibly for several weeks, maybe back to the recent highs, maybe higher.

But, of course, as has happened all through these unstable times, it will be a rally that can be killed by a tweet.

(click on the chart for a larger view)

$SPY #Options – Day trading calls – 10/10

INITIAL ENTRY:

FIRST HALF OFF:

CLOSE OF DAY TRADE

$SPY #Options – day trading puts – 10/8

NOTE ON SECOND TRADE: Took profit of 50%, by habit and close to the end of the day, but sold way too soon as the market continued its selloff making the second put position worth 81% at the close.

These trades were based on this post:

#Options – Buying calls and puts

And this context:

#MarketTiming – okay, we are close to a bounce…

Note the final comment in the link immediately above: “Regardless, a bounce now will still be a bounce to sell again.”

All Twitter timestamps are Pacific Time.

FIRST TRADE:

SECOND TRADE:

#Options – Buying Calls and Puts

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?

Doesn’t have to be. Not for day traders.

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

Let’s consider 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.

$SPY #options – Day trading calls in the 10/04 market bounce

This trade was based on this post:

#Options – Buying calls and puts

And this context:

$SPY #Options – Day trading calls for 10/3 bounce…

All Twitter timestamps are Pacific Time.

FIRST TRADE:

SECOND TRADE:

CLOSE OF DAY:

$SPY #Options – Day trading calls for 10/3 bounce…

This trade was based on this post:

#Options – Buying calls and puts

And this context:

#MarketTiming – okay, we are close to a bounce…

All Twitter timestamps are Pacific Time.

ENTRY:

FIRST HALF

CLOSE

(CLICK ON THE CHART FOR A LARGER VIEW)

#MarketTiming – okay, we are close to a bounce…

Okay, we are close to a bounce.

Pretty much everything is oversold.

All of 3x-leveraged ETFs I follow are on sells and oversold – eight out of eight – TQQQ, TNA, FAS, LABU, ERX, SOXL, FNGU, UPRO.

That does not happen often. Last time they were all together all at once (in August), TQQQ went from 55 to 64 in the next four days and to 69 in six.

But SPY is the indicator to consider this time (see the chart below).

SPY is at a level it rarely sees, five times actually since May, and each time signaled at least a bounce if not tomorrow (Thursday), soon…

Given that SPY is a broad measure of the general market and a big-money index, when it bounces it will take most of the market with it so it might be prudent for swing-trading shorts to tighten stops or take some profits here.

Regardless, a bounce now will still be a bounce to sell again.

(click on the chart for a larger view)