Time to make money with PBR: OIL BITCHES

mGrunin

mGrunin

New member
Jul 18, 2009
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Grunin is back!

So last week I had my GLD thread where I recommended a gold trade to the members of this forum. The trade turned out to be a success and I hope that some of you profited off it.

This week we are hunting down a trade with PBR. They are a major oil producer in Brazil. I don't give a rat's ass, what I care about are how the technicals line up, and the technicals tell me to go long.

For the past two weeks the stock has been holding $13.32 as a support level very closely. It has had a past history throughout the year of bouncing of this exact same level. Our focus would be capitalizing on this information.

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I have also put together a video discussing this idea, and the position I have in mind going into tomorrow.

[ame="http://www.youtube.com/watch?v=BqLiY2VPLI0"]PBR Trade for December 30th - YouTube[/ame]

The position would be the $13.50C/$14.00C Vertical Call Spread expiring in 11 days. Maximum ROI is slightly above 100%.
 


If you don't mind, can you post a list of books/guides/websites you read when you started learning this stuff?
Would appreciate it.

Thanks.
 
BradGrant said:
If you don't mind, can you post a list of books/guides/websites you read when you started learning this stuff?
Would appreciate it.

Thanks.
Click to expand...


I posted the following resources on my original trading thread:

Recommended reading for those looking to trade:

I highly recommend using Ameritrade as your trading platform. Make sure to download their "Think or Swim" software.
Click to expand...
 
Another interesting play I like is buying the $54.50/$55.50 Call spread for Facebook expiring this coming Friday. There is a nice support level on the daily that sits right at $54.83. On Friday, Facebook finished trading at $55.54. Right now in the premarket it is trading at $54.95, with a low of $54.80 in the premarket. If we can open below $55, this would also turn into a great entry point for this call spread.
 
I also just purchased a bunch of shares long with Facebook @ $54.16. I have a good feeling that we will see a rebound today.
 
Well, that didn't take long. FB is already back up to $54.90 - so a 1+% pop since I got in 15 minutes ago. I only threw $10k into the position, and since it is common share, the gain isn't huge but currently at $135. I guess it will pay for lunch today.

PBR on the otherhand has been gaining slowly, but is getting up there. Currently up nearly $1k on the position.
 
mGrunin said:
Well, that didn't take long. FB is already back up to $54.90 - so a 1+% pop since I got in 15 minutes ago. I only threw $10k into the position, and since it is common share, the gain isn't huge but currently at $135. I guess it will pay for lunch today.

PBR on the otherhand has been gaining slowly, but is getting up there. Currently up nearly $1k on the position.
Click to expand...

What's your target to sell FB or is this a long term hold?
 
can you explain a vertical call. that is buying the first one and selling the other at the same time right?
 
am I doing this right? seems wrong

yes I am a complete noob to options but I want to get my feet wet.

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OP- I pretty much only use options to hedge my equity positions. But I'm curious about vertical spreads now..

Question though: if PBR trends sideways for the next 2 weeks, your trade is a loss, right?

I agree with your technical analysis and the support level you identified looks like it has held up multiple times, and I'd expect it to do so once again.

But I'd be concerned that PBR may just continue to trend sideways for the next few weeks as the options near expiration. This week should be lower volume with the new year's holiday and many of the pro traders/wall street guys still gone until January. Might not see much action.

Just my 2 cents. Am I wrong? Is the trade not a loss if PBR goes sideways? Is that not a big concern of yours?
 
You don't buy beer...you rent it. You're only investing in a buzz, which has diminishing returns. No real equity position to speak of.

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