FFIV, LVS, WYNN, NFLX

It has been awhile since I did a post so I’m going to do a juicy post. This week and last week market direction is a joke. Direction is unclear and it had causes many traders to lose money including myself. Though I didn’t lose much but I didn’t gain much either. Last week I manage to come out ahead and took home only $782 for the week. It was one of my slowest week so far but I have my reason which is why I didn’t trade much last week. Coming out ahead in positive territory is still a plus and definitely better than losing. Most of the stock right now is currently still in range bounce and waiting for a define direction. Lets take a look at a few stocks.

1st up is FFIV
FFIV have been treating me very well for few weeks. I was profiting so much from this stocks because I study and did my hw. HW definitely paid off now lets take a look at FFIV chart. FFIV still consolidate in the range and bouncing off the 104 support. The 104 support is a very strong support basing off almost a 4 months based. I am still very bullish in this stock as it seem and it still on my watch list. My target for FFIV still the 120 but I’ll let cool off a bit till it pick up more momentum. An ideal long entry is the 112. If FFIV can break the previous high of 112 on volume u should be in it.

FFIV

Next up is LVS, Las Vegas Sand also been serving me well for short period of time. Like all other stocks this stock is consolidation in the range and waiting to break higher. Last week I caught a move which put me over to the positive territory for the week thanks to LVS. Now lets take a look at LVS chart. This stock has been on an uptrend since July on it low of 34.67. Right now is sitting under the resistance of 47.50 and waiting for strong volume to break away and break out of the 200sma on daily chart. Put this on your watch list.

Next up is WYNN, can’t seem to win all the time against WYNN. The odd against the house is low so we just have to wait for the right opportunity to strike. This stock have been serving well for the last 3 weeks until early this week. Now lets take a look at the chart of WYNN. I caught the move from the 108 all the way up and into this consolidation range. Made ton of money the last few weeks but it shook me out early this week. WYNN has the consolidation range from 112 to 116.50. On Monday this stock rally above 116.50 along with the strong index. So I said to myself this is the moment to break away so I hop in the OCT 120 monthly and load up a shit load of 120 WKLY also. The market seem okay till uncle Ben speak and everything just fell off. Market was giving back pretty much all the early gain and WYNN retreat below 116.50 and option traders pretty much gave up. I ended up taking a loss on the monthly which wasn’t much but the damage was huge for weekly. Toward EOD I was about to sell all the weekly and taking a 50% loss but I saw someone bought 1000 contracts at like .32 and .34 which was pretty big. Through out the day there were 4k+ contracts exchange on the 120 weekly. That 1k contracts purchase toward EOD give me some indication that there is something I don’t know that other people might know otherwise who the hell would buy it. So I held it overnight. Next day market gap up and WYNN gap up as well. The option which was at .34 pop to .40.

WYNN

Now lets take a look at the weekly option. So I got an average of .68 and thought it was okay till uncle Ben speak. I bought multiple times through out little bit here and little bit there. I had 45 contracts in the 120C weekly and 18 contracts in the 120C monthly. Sold the monthly for a small loss which is okay but weekly I sold all of it the next day at .34 cents for 50% loss.

WYNN 120C option

So again you can’t always win. Stock sometimes fake you out just like this WYNN did this to me on a day that I plan to get heavy. So I sat out for the rest of the day.

Next up is NFLX, was watching this NFLX from Jamtrades alert today. So I took a look at the chart and think this NFLX is ready to move after from a triple bottom temporary low. NFLX caught some strength today and was up through out the day. I was able to pick up some 60C weekly after this stock already rally over 8%+. The break of the intraday high got me in this NFLX 60C. Lets take a look at the chart. So I got in this NFLX 60C on the break of the intraday high at 2.23 and option is now at 2.97. It seem like we going to gap up tomorrow but let see how this play out.

NFLX

All day I sat around the computer just to make only 1 trade and was well worth it. Well see if tomorrow it will paid off or not. Haven’t have much time to do blog post because my day time job. I’m working hard to focus on trading and want to trade full time. Things been clicking for me lately and I could say I’m doing pretty well. Okay folks trade well and good luck to all tomorrow.

GOOG possible entry

I have been watching this GOOG for weeks and it serve me well for the last 2 trade I made. GOOG drop from 637 down to the 566 in a well define downtrend. I was waiting for GOOG to hit the 560 area support but it was hovering around the 568 and 566 yesterday and couldn’t break it. I want to get a better price for my Put spread 560/555 so I waited which is probably not the best idea. Anticipate a break out of the downtrend channel and 560 support I should’ve sold the 560/555 anyway for this week expiration. At the time the 560 put spread still got $1.60 left of premium which is dam good but my greed or tight entry stop me from entering the high possibility gaining trade. Had I put in the trade GOOG rally to 580 today at this time I can buy back the option for .20 which then net me $1.40 WOW. YES WOW is the word I total miss the trade I have been watching because I want a better price “who doesn’t” . Well because of that I miss a good trade which is fine not a problem is a good lesson learn. But look at my point if GOOG did hit the 560 I would’ve gotten $2.10 instead of $1.60 and selling at $1.60 now you currently will be down .50 which might shake some of you if you don’t have a good tolerance for holding. Here is the chart explaining why I’ve waited. I still don’t think is late at all because GOOG just barely break out of the down trend channel band. This is just the beginning of a good long swing. Now I have to wait for GOOG to pull back and might anticipate a bull put for the June15.

GOOG

Now I will show you a smaller time frame for you to see GOOG just begun breaking out of the down trend. We’re all looking at a small trend. This is not for anyone to do a long term investment. My strategy usually last max is 1 week. So I’m not recommending anyone to do what I do for a longer term like 2 or 3 months out. I preferred semi short term strategy and this is not for day trading. Most of my position will be an overnight hold from anywhere of 1 days to 14 days max if I’m happen to sell a monthly option.

GOOG

Look out for  a pull back to get into a good entry on this GOOG. Thanks for reading and keeping up with me

My Watch List

Talking about a watch list then there is no right or wrong list that people are trading out of. Everyone have their own list of stocks they like to trade mainly on. As for me I do have roughly about 50 stocks I track daily but probably trade maybe 10 out of those 50 I tracked. I categorized my list and take a few symbols of each sectors and study the behavior of it. Here is what I have under my watch list.

Technology:

AAPL, AMZN, GOOG, PCLN, NFLX, BIDU, SINA, YOKU, CRM, FFIV, IBM, FB,

Financial:

C, JPM, WFC, BAC, GS, V, MA, MS

Casino:

WYNN, LVS, MGM

Agriculture:

POT, MOS, CF, MON

Material:

X, CLF, CREE, MCP, AA

Restaurant:

CMG, GMCR

Retail:

LULU, RL

Health Care:

ISRG

Index:

SPY, SPX, QQQ,

That’s my watch list that I tracked everyday. Out of all those symbols maybe I trade probably 10-15 symbols. I’d trade a lot of credit spread so I preferred stocks that have increment of $5 in their option. Usually stocks that are $100+ but occasionally I still do spread on stock that have $2.50 increment. Everyone have their own unique list that they like to trade out of but you want to diversified and sometimes have position in different sectors. As you can see on my blog I charts mainly on those symbol in and out study the moves and wait for the set up to come to me. My main strategy is credit spread so I study the resistance, support and time frame. Timing is everything so I sell premium on the stock that is least likely to reach the strike. Understanding the fundamental, technical, and sentiment of the market put you in favor of your position. All of that being said I still regularly manage my position. Study shown that 80% of option expires worthless and 20% of the option make money. So my main goal is to manage the other 20% and move it closer to my favor such as being bullish or bearish in a directions strategy and timeframe selection. If you understand how credit spread work and strike selection you in for some serious cash. An account with just $3000 can make $400 a week selling weekly premium. If you constantly selling weekly option and make $400 a week your capital can grow to a very nice chunk. Not that you will make $400 bucks every week but sometimes you do incurred losses. If you manage those losses correctly it shouldn’t be that much compare to what you will make. Some of the position I sold the time premium for only $1.00 but put out a capital of $4.00 and people don’t see this as the way to go. They think if they put out $4.00 they want to make $4.00 (100%) on that money right away. Let said you put out $400 for an weekly option you probably  make a very good return if stock run 4% toward your direction and that is fine but what if stock run 4% away from your position.

1) You will lose 50% of your money

2) Stock has to run 4% back for you to break even from initial points.

3) You just loss 2 days of time premium assuming if stock ran 4% back in the next day and you still only recover probably 70% of the money. That’s still a loss

4) Now your stock has to run another 5 or 6% toward the strike you purchase

5) You only have 4 days left for your stock to reaches the strike price.

Man what all that reasons your position is not in your favor.

Now lets said if you purchase and the stock ran 4% toward your direction yes you made a 75% gain on your capital. All I can said is

1) CONGRATULATION !!! you got it this time. Lets see if you can do that 10 times in a roll.

Now lets said if you sell a credit spread 4 or 5 strike out of the money only collecting $100 for every $400 you put out for a weekly option.

1) If the stock move 4% toward your direction strategy bear call or bull put whichever one you do it. You probably can close it for 50% gain on that $100 for 1 days of work.

2) Let said if stock move 4% against you but still within the strike price you sold you’re still save

3) Now same scenario stock move 4% against you and move back 4% the next day to your break even initial point you just gained 2 days of time premium.

4) Now your position only have 4 days left after 2 days moving nowhere in order for you to incurred a loss stock has to move 4% against your direction one more time plus maybe another 2% for your strike to be in the money. Plus the stock has to do that within 4 days timeframe. It is very unlikely but don’t discount that out.

I personally think that credit spread is the way to make money and preserve your capital while growing it slowly day by day. As you get move comfortable with strike selection and market direction you can always get a bit more aggressive by selling 1 strike or 2 strike in the money. This put you in a greater risk but you can collect over 100% of the premium. Find your own strategy and what you are comfortable with pursued that until you perfected then move on to a different strategy.

PCLN NEW WEEKLY (5/31 – 6/8)

PCLN oh PriceLine. He served me well the last few position I traded and with that being said I got a new one for him also. Looking at the chart PCLN continue to show weakness and he got a previous earning gap to be fill. Taking the liberty of this opportunity I sold a credit spread 6 strike out of the money on this PCLN for $1.18 to be expires by Friday week of 6/8. The trade was execute yesterday and this PCLN already tank down and almost fully fill the gap. Gap expected to by fill at 597. My credit spread option I sold for $1.18 can buy it back for .53 as of 9:50 AM Pacific Time netting me .65 cents that’s over 50% in 1 days. I could close it right now because it only have .53 left of premium to collect but I have to hold till next Friday. Think about it do you want to hold for 1 more week to collect another .53 cents and risk of losing all the profit. Let me tell you I am not prepare for that so I will preset to have this option buy back at .50 or will exit by the end of the day which ever come first. Usually if you can get 50% gain on your position in 1 or 2 days you take it. Here is the position I inititated.

5/31/2012 7:42 AM PACIFIC TIME

Sold PLCN BEAR CALL 650/655 for $1.18

UPDATE: 6/1/12 10:15 AM PACIFIC TIME

Close out PCLN BEAR CALL 650/655 for .50

Net profit. $.68 cents.

PCLN BEAR CALL 650/655

So far so good selling spread keep me from losing money in the market. Though the money is not a large amount but with the piece of mind that is harder to lose money when almost everything work in your favor.

AAPL NEW WEEKLY (5/31 – 6/8)

Started a new freshly weekly position on this AAPL. AAPL chart is a tougher one for me to read and get a good feel were I can pick my strike to sell. I sold the bear call on AAPL 575/580 for $2.22 early in the morning. Market tank early on Thursday which I expect it to go lower therefore, I sold the bear call AAPL 575/580. I might have been too early in the entry because I knew there was resistance at 580. With an unexpected reversal in the market AAPL rally back to the top and hit that 580 resistance and making a tripple top through out the day. I had a bad feeling about this AAPL because it want to break that 580 support and is very strong compared to GOOG and PCLN. Had I not sold the credit spread instead of buying a put in this AAPL I would’ve gotten shake out. Selling spread give me enough time for APPL to move freely during the clock period. If I would purchase the put instead of selling the spread my option would definitely loss roughly about 35% when AAPL made a rally from 572 to 580. Which that much shown on your P/L screen you would’ve gotten panic and bail on your position.

5/31/2012 7:20 AM PACIFIC TIME

5/31/2012 sold AAPL BEAR CALL 575/580 for $2.22

UPDATE 6/4/2012 7:41 AM PACIFIC TIME

Buy back AAPL BEAR CALL 575/580 for $.88

Net profit $2.22-.80 = $1.42 Not too shabby for 3 days of work.

AAPL BEAR CALL 575/580

You can see every here in the chart and why I chose to sell those strike for time premium. With that being said I am currently up about .48 – .50 right now in this position. I will continue holding this over the weekend and net another 2 days of premium and if we open up on monday will a small gap down I think I might be able to get $1 out of this position. Never know anything could happen. We might even gap up on monday but I don’t care just stay below 575 for me by Friday. Stay tune folks for more update position and chart.

AMZN NEW WEEKLY (5/31 – 6/8)

I started a new position on AMZN weekly 5/31-6/8 and also on the AMZN monthly one too. I will explain why I have both of the position in the chart. Here is the entry on the AMZN position for the weekly and AMZN monthly.

WEEKLY (5/31 – 6/8)

12/31/2012 7:21 AM PACIFIC TIME

Sold AMZN bear call 210/215 for $1.82

UDATE: Seem like market has reach a temporary bottom as all the news headline has been shouting. AMZN bounce with the market which I expected with the market. AMZN made a real nice bounce to 216 and did a pull back to the 212 that’s when I think is time for me to get it. It seem that AMZN want to retest the upper band at the 224. If that happen I’ll be there to write a shit load of the 225/230 call spread. As of right now I’m taking a loss here at $2.65. My loss will be $2.65 – $1.82 a loss of .83 cents. I thought AMZN really want to fill the gap when it broke the 210 and got to the 207 but because SPY bottom out at the support level of $127 area. Oh well now I’ll be waiting for a good entry to continue selling call spread on this AMZN but looking into the 220 June 15. By the way I’m still holding my 215/220 below.

Take a look at the chart below and you’ll know why I have to exit.

AMZN

12/31/2012 11:54 AM PACIFIC TIME

MONTHLY

Sold AMZN bear call 215/220 for $2.00

(__________________will update__________________________)

Now most of you will wondering why I sold two  AMZN position on the same day but got a different pricing. Early in the morning AMZN tank of the 1st hr of the market to 207 so I thought okay he’s going lower to fill the previous earning gap because we in the middle of it. Then after an hr later market did a reversal and rally back and this AMZN rally to 213 and hit the top band. I knew AMZN is hitting a lot of resistance on top and wasn’t too worry much about the weekly.

I then start thinking

1) AMZN still need to fill the gap

2) he is hitting the top band resistance around 214 and 215

3) He will fill the gap sooner or later just make sure to give him some time.

With those reasons I sold the 215/220 monthly instead of the 210/215 monthly. That’s why I have both position one weekly and one monthly. Selling spread give me lot of time to think if my position is still working in my favor rather than try to guess where is the market will be. All I need to know is that by the time of expiration AMZN just need to be below where the strike I sold it for. Here is the Chart explaining why I have both position.

AMZN BEAR CALL

He is one stubborn dude but he will go lower try to fill this gap within the coming week. If he tank lower within Monday or Tuesday and if get good enough profit I will take it to free my capital instead of holding it till Friday. Unless he still got a lof of premium left and if my position still looking safe I might hold it till Friday but I never hold anything till Friday to collect the rest of it. I usually buy it back when is .30 to .60 area depending on how much I sold it for. If I see the position is no longer in my favor or have some type of risk I will take profit even if .30 cents or .40 cents gain from where I sold. Hope you guys like it and I will keep you posted once I exit the position on this AMZN.

SPX

Standard and Poor 500 I forgot to blog about the position I have on this SPX. Market has been a choppy zone for a few weeks due to the Greece problem and everyone is confused and doesn’t know where is the market is heading. I took this opportunity to sell an Iron Condor on this SPX way out of the money on both side to capture some time premium. I took the highest resistance point and the lowest support that I think SPX won’t hit. Selling an Iron Condor is a great idea in an indecisive market when you don’t know the define trend. The Iron Condor can back fire if you don’t give it enough room for your individual stock to move. Therefore, before you initiate an Iron Condor Strategy make sure you give your stock enough room for it to move freely.

symbol: SPX

strategy: IRON CONDOR

5/29/2012 9:59 AM PACIFIC TIME

Sold IRON CONDOR for JUNE 12 monthly for $2.20 (1360/1365 Call and 1265/1260 Put)

(___________________________will update_____________________________)

This is a very nice position for the June monthly as you can see I gave SPX plenty of room to move free while I deteriorate the time premium out of the position. As of today even with the drop of over -24.95 points on the SPX my iron condor still profiting. Look at the chart and you can see why I chose this strike to sell but remember if you don’t think that your position is working in your favor you can always opted out and take profit.

SPX IRON CONDOR

okay that’s it folks I will keep you guys updated once I exit the postion. Thanks for reading.

Market Drop Due to Poor Job Data

Market took a dive today in the premarket after unemployment job data reported worser than expected. The DOW currently down over -225 points right now and it work in favor of all my new position that I have initiated on Thursday. I closed out the last position on V and took profit on it. Started new position on AMZN monthly and AMZN new weekly, also open new position in AAPL, WYNN and PCLN. I will break out into individual post and put up charts supporting my entry. So guys make sure you take a look at it and make some money.

WYNN

Here is a new position I just made upon watching this stock for weeks. My fellow traders in the Sang Lucci room is getting smoked left and right by this WYNN. He fake a lot of us out, one moment it look like is heading for the 110 but failed every time. I still keeping close watch in this WYNN for a possible break out above but during the mean time lets catch some premium baby. Here is the position I initiate yesterday.

5/29/2012 Sold WYNN bull put JUNE 100/95 for $1.14

(__________________will update___________________)

By looking at the chart below WYNN will come back to the 101 area but holding it support at the 100. I will let this WYNN to deteriorate all the time premium. As a credit spread seller I like to have an option expires every week so for now I have WYNN june 100/95 but will look into the 100/95 next week when the new weekly option is open up. Timing a break out is very difficult because you don’t know when it will break out. If you are good at timing the break out then you will make a lot of money. It is very possible to lose a lot of little trade to find a big trade but why not make consistence winning trade. Not only timing is a difficult part of trading but you also have to dealt with psychology of trading. This is just too much, you have to be right on the direction, timing, strike price, and select the right time. Credit spread allow me to remove all that and just focus on where is the stock will be by the time the clock run out. Is it either above or below my strike price that’s all but during that time you can alway call a quit if you don’t like your situation. Is kind of like playing basketball Lakers VS Clipper. Lakers give the Clippers 15 points lead and the clock have 5 mins left. So the Lakers have to beat the Clippers by the time the clock run out. If the Lakers beat the Clippers when the clock run out you get 3:1 winning. For every $5 you get $15 if Lakers beat the Clippers. If Clippers win for every $5 you get $3 dollars. The problem is I bet 70% of the people will bet on the Lakers because they want that $15 bucks. Any back to the WYNN scenario here is the chart.

WYNN BULL PUT 100/95

That’s it folks keep on the look out for more possible trade and chart. Don’t forget to follow me on Twitter to get instant tweet when a blog is posted.

Closing Out Most Of The Credit Spread Trade

Today market drop roughly about .90 in premarket which took most of my position premium to close to zero. I closed most of my credit spread position out for either 60-85% gain. I don’t need to wait till Friday expiration to close them out. Except my AAPL which I incurred a loss in that position. He is definitely strong compares to most other stocks. Some of the tech including $FB is take a dive. Facebook recently not doing too well since the IPO at $38 dollars and now is under $30. Market is just forcing a lot of trader to lose money and cannot stay in the long position nor the short position. This market is making it very tough for a swing trade but is perfect for credit spread strategy. The stock can either move up or down during the time frame as long as it expires above or below the strike sold price. Most of the professional traders who made consistent money sold naked for premium. Selling naked to collect time premium is probably the best strategy a trader can utilized. Your account have to be approved for option level 3 in order for you to sell naked but that in mind you still can do credit spread to cap your losses. By capping your losses the advantage of that is you don’t have to front up a lot of margin. So with that being said I love credit spread and this is how you make consistent money for income.