$25KP Review

Please see extensive comments on Apple and Dell position in $10KP Review as I feel silly cutting and pasting it but it’s all the same except for the number of shares.

I’m going to attempt copying in a different format, more like the weekly spreadsheets and we’ll see if it makes a mess or not.  The same thing goes for GOOG as goes for Apple in the $10KP.  I can’t do the minutia of every trade, when I say get out of a position, I don’t mean that second, I mean set a very tight stop and often I forget to emphasize that and I’m sorry as I see many people are still jumping in and out of things right when I say.  I’m just trying to convey these trades literally as quickly as I’m making them for myself and short of linking virtual portfolios or making the trades for you (this is why we’re starting a club and a fund) I just try to tell you what I’m doing, generally before I do it.

So Google is another good example as we had the $710 calls and at 10:18 I said: "take the money and run on the GOOG $710s in the $25KP" and I should have said, "take the money and run on this run by setting trailing stops as we discuss ad nauseum in the strategy and K1 sections."  I’m sorry if I don’t make clearer comments sometimes but you have to realize I am also manageing several virtual portfolios and repositioning dozens of spreads and, when I see one I REALLY like the look of, I tell you and give it an XXX.  At the time of the post the $710s were $16.25 and the rule there is (as it was up from $9) set a 20% of the profit ($7.25) trailing stop ($1.50), NOT get out that second.

Since I wanted to get out I actually was watching for a $1 drop, which didn’t come until around noon, when I got the rejection I was looking for at $700 where I took $20.10 and ran.  There is a HUGE difference between following the rules (and Optrader has made excellent comments on this subject) and simply executing trades.and if you LEARN to trade instead of asking for trades you can double your returns. 

http://www.stockandoptiontrades.com/ is an excellent site (run by Sage) if you want to concentrate on a few trades in great detail each week and I highly endorse it for those of you looking for more handholding than we give here.

This site works best when I can concentrate on identifying opportunities that make money rather than going over and over the minutia of trades we’ve already identified and it is your responsibility to get up to speed, not my responsibility to slow the site down to the level of the least experienced trader.  I don’t want to sound bitchy but every once in a while we get new members who are looking to be stepped through each and every move and that is simply not what we do.  I love teaching and I love helping people but I can’t do it to the exclusion of trading during the days so please, please, please take the time to study our HUGE body of learning materials as well as reading through a solid month of posts and comments and paper trade until you are ready.  Options are risky and difficult to master and if you are coming in here expecting to just trade with no previous experience of practice you may as well kick the pilot out of the next jet you fly in and land it yourself as it’s essentially the same thing.

I hate truisms as they often aren’t but if you fail to plan, you plan to fail is very true regarding option positions.  Don’t just wait for me to tell you what to trade.  Have a target or ask me for mine, I may not notice a target being hit at the time as I may be busy moving several million dollars worth of contracts for my private clients while the 2 Google $710s top out in the $25KP.  I don’t have time during the day to go into this sort of detail but, as long as it’s not the 3rd time that day someone’s asked, I will always prioritize answering a question on a current portflio position.

I did a strategy review for this virtual portfolio on Tuesday so I won’t do that again.  In general I’m happy with the mix but we need to fix the TSO and DIA put spreads, probably adjust SHLD and the GOOG $660/$650 spread.  HMY is really ready to take off so we may want to stop out 1/3 of our callers there.  That strategy would be stop out 1/3 of the callers at .95 (even) and set a stop on 1/3 of our calls at $1.25 (up .10).  Then stop out anothe 1/3 of the callers at $1.50, raising the stop on the first 1/3 of our Jans to $1.50 and setting a .20 trailing stop on the next naked 1/3.  If we get as far as stopping out the last 1/3 of our callers at $1.75 without stopping out of our longer calls, we can probably ammend our strategy to sell the $12.50s as a cover but it all depends.  That’s another truism:  A half-assed plan is better than no plan at all!

Let’s see how this ends up looking: