The Official Trading Thread

Tomorrow will be an interesting day. Last night news out of Europe sparked a strong rally in our futures equity market. Currently up 1%. In the early morning we have job figures coming out, which includes the unemployment rate. This is always a very big report and sets the trend for the rest of the day. If market likes the numbers, we could possibly see a 1.5-2% day tomorrow. If not..well this whole rally will be faded before the markets even open up at 9:30 am; considering the report hits at 8:30 am.

In regards to Apple, I have called the bottom perfectly. Since last Friday, Apple is up $25 - 6.25%. Not to mention that if the job numbers are liked tomorrow, the green market day will definitely push Apple up to $425.

Chart I put together for Apple:

https://www.tradingview.com/v/EmFrCRg3/

Tesla:

https://www.tradingview.com/v/yKbCo73w/

Google:

https://www.tradingview.com/v/K15NlB3p/
 


Looks like ever since CPAUser was banned..this thread became even quieter.

Update on Google since my last chart:

https://www.tradingview.com/v/yDkvkJ5N/

Levels to buy are quite clean.

Regarding the Tesla chart, I was wrong. News came out on Tesla's estimate orders in a few years and that sparked the stock. News > Technicals.
I am currently bullish on Tesla and have positions to stand behind that.

Regarding Apple, not worth touching it right now. Horrible performance for the last two days. Wait for a move above $425 for a long, or a move below $410 for a short.

Premarkets just opened 6 minutes ago. So far:
Tesla: $125.00 ( Nearly +$3.40 from market close)
Google: No trade yet.
Apple: $415.98 (+93c from market close)

Index futures right now are over 0.50% in the green right now. Looks like tomorrow the markets can continue their push higher.
 
Let me cover the actual Tesla positions. By the time I took the screenshots..Tesla is already at $126.48 in the premarket. That is pretty insane. That is a 4% gap up...
Keep one thing in mind, take premarket action with a pinch of salt. Premarket always has very little volume compared to normal market hours. So many times a stock might open up 2%..but within 30 minutes lose all of its gains once true volume comes in. This is known as a fade.

Either way, lets stick with the current figure of a 4% gap up.

For one of my clients, one hour before the market close I opened up the following Tesla position:

wHLbAhN.png


This is a simple naked call. This is a small position (due to portfolio size), and this option expires this Friday. The strike price is $120, and the premium was $3.80. If I made the decision to hold this option until Friday closing, then the stock must be at $123.80 to breakeven. Lets say that Tesla does open at $126 tomorrow..well it is well above that level AND in addition there are still 4 days of trading left. Days = Time = Theta. So you can look at the value of the option tomorrow as $6 + theta. I can roughly say that if Tesla does open at $126 tomorrow, then the value of the position will be 100-150% higher. So a gain of $1,500-$2,000.

For my next client, this is also a bullish position, but constructed differently:

dWdM7sl.png


This is a bullish bear spread. Basically I sell a spread, and the leg that I am selling has a higher value than the leg I am purchasing. I sold the $120 leg, and purchased the $115 leg. Reasoning? First of all, time is on my side right away. The breakeven level of the position is somewhere at $119.50. So even if Tesla does not move a dime for the next 72 hours. I pull in gains. Hell..I can even have the stock drop a dollar..and I would still be in max profit level.

What is the catch? The risk vs reward. Position is risking $3,420. Reward is $2,580. There is a defined loss, and a defined gain. When it came to the naked call positions above..there was a defined risk ($1,640), but no defined gain. Hell..if Tesla runs up to $150 this week, that would probably be 700% gain. (if done by Friday..much higher if done with time still left).

Either way, if Tesla does gap up like this, this 2nd client will be sitting well on the position. The maximum gain of $2,580 will not be shown..but it would be somewhere in the neighborhood of $1,500 or so. Then it is all a matter of allowing time to pass by so that the options I sold expire worthless.
 
One thing I want to make clearer about what I said above. If a stock does get very far from your strike price; lets say to the upside. At some point your delta will be 1 (intrinsic value is 100%, extrinsic value is 0%)..so having any time left will not add any value to the position.

Couple things I want to mention in that second screenshot. The 206.82 number above is the total delta for the position. You can see it as: every 1 point Tesla moves up, there is $206.82 in gains. This amount will continue growing higher since the deeper the option goes into the money, the higher the delta is. Next major one is theta, which is 198.04. This lets me know that in the next 24 hours, I would receive $198.04 in gains because time passed. Then we have vega at -14.39. Basically if IV (Implied Volatility), drops by one percent point, I have a loss of $14.39. I did skip Gamma, which is -5.70 since it is a close correlation to delta, and in this specific spread, it isn't something to be concerned about. I will cover gamma in a different post later.
 
maximus said:
Because your soft sell was evident from a mile away.
Click to expand...

I see. That must be a very soft sell considering I didn't post a single sales pitch/idea in the thread, sig, avatar...or anywhere. Guess using the word client was too much, I will refer to future screenshots by account #'s. Cheers.
 
Haters gonna hate. That's just how it is. People love to tear down a guy trying to do something, share something, make something of himself.

That is why I have decided to become a McDonalds shareholder.

Enjoy your McNuggets.
 
Holy shit! Did anyone catch wind of the action on Tesla today?

https://www.tradingview.com/v/TMTjWRae/

14.27% drop today. All because an analyst from Goldman Sachs downgraded Tesla and set a $84 target. This is all while the stock is trading at $130...
For those following Tesla, this stock has quadrupled in four months. Longs have been enjoying immense gains all this times, and many ran for the hills today on the downgrade.

I am beating myself over not taking a early morning position, when it was only down about 1% at the open. The amount of money that could have been made today was ridiculous. Just for show:

kNioHnt.png


Thankfully I caught a bit of the action. At the break of $115 I opened puts, and closed them at $110. Solid 105% gain in about 30 minutes. Either way..I still missed the major move for the day.

What the stock does for the rest of the day will be very interesting.
 
By the way, I am holding a straddle play on Tesla for tomorrow. Naked calls and puts. This is a strict volatility play. If Tesla moves >5% tomorrow in either direction..I will be picking up solid gains. With today's turmoil, tomorrow should not be a slow day for Tesla. In addition, Ben Bernanke is giving a testimony in WDC...so the markets will be violate tomorrow.

In regards to other positions. I am holding a $435C/$445C call spread on Apple for this Friday. Position is only at a 10% gain..and I my finger will be quick on the trigger for an exit. I need a +$6 pop just to leave out of the position at breakeven on Friday. ( if I hold till then). If it moves +$10..then a 400% gain. If it moves +$15..then a 900% gain.

Lastly..I am holding a calender play on Google for it's earnings. This is more of a test play since I haven't played around with calenders during ER before. Currently down 10% on the position..but the critical day for it is the day after earnings. The drop in volatility + consideration of stock movement will determine my return.
 
Actually forgot to mention one last position on one of the accounts. :)

I opened a 165P/164P position on SPY. Expiration is AUG 13..so in about 30 days.

This position is based on S&P dropping about 2-3% from its current levels. Risking 1 unit to make 2.5 units for this position.
 
mGrunin, those low risk, high return trades and the Tesla trade for tomorrow is genius.

Are you consistently making money trading? Can you give a ballpark on how much you are making a month if you don't mind?
 
r3p1v said:
mGrunin, those low risk, high return trades and the Tesla trade for tomorrow is genius.

Are you consistently making money trading? Can you give a ballpark on how much you are making a month if you don't mind?
Click to expand...

Honestly, one of the best strategies is waiting for a stock to break into bullish/bearish territory, and as long as IV percentile is not higher than 65%, then a 2-3% OTM spread will yield very sweet returns.

Right now, Tesla is a horrible pick for that strategy because the IV percentile is at 85%. Basically..at the highest part of its range. 50% percentile would mean that the implied volatility is at the usual average. With as 85% percentile..then even OTM spreads will not have the best yields since IV is so high.

I have been profitable every single month this year, and that is both going long and short. I make on average 5 figures per month.
 
Even on the longer term..there are some attractive plays even though these are closer to "lotto" plays. So we know that in the fall Apple is releasing the new iPhone and in addition we will see the new product launch for Spring 2014. For the past 3-4 months Apple has been forming a pretty solid bottom at $400.

Well..we can pick up the SEPT 13 $500C/$520C. You can risk $540, for a return of $9,460. That max return would require a $505 price level. Nearly 2,000% return. Is it a difficult level for Apple to reach? Yes, but far from impossible. With earnings around the corner, if they get a beat, Apple will already be trading at $450+..and then throw in the run up to the iPhone 5S/6 launch..then we are closing in the gap. Since these are far into September, we will have the chance to watch the conference for the iPhone + new products, and also get the sales figures on the first weekend sales.

I am currently contemplating on a $2,000 risk play. $35,000 reward if we get to that level.
 
Any suggestions of a good trading platform available to europeans? Sorry for redundancy if this has been mentioned before, I've read this thread up to a point (will continue to do so) and couldn't find anything :)

thanks.
 
So on the market open I closed the puts on the TSLA straddle, and currently riding naked calls. I closed the puts for a 35% loss, and right now holding the calls at a 120% gain so far. Will be looking for an exit soon.

My calls and puts had the same exact position value.

Apple is also doing a decent job in pushing higher, currently at +$1.25. I still need for it to go higher since $431 is a worthless price if I hold until Friday. Heading $435 today would be great since that is when the big $$$ comes in. Either way, I am up 40% on this position overall.
 
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