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I took down my “UVXY power play!” simply because...if I throw a dog a bone, I don’t want to know how good it tastes. The VIX etfs WILL spike immediately leading up to and immediately after the AUG 30th $200B in Chinese tariffs. That’s a simple fact, unless Trump decides not to pull the trigger, but since he just announced he’ll put a tariff on all $505B if he wants...I don’t see him backing down. Act accordingly.
Shawn_McCune Jul 21, 18 12:48 AM
Also, what I should mention is that Implied Volatility could play a huge part in the premium costs. I would hesitate if the premiums are greater than $0.5.
Hasafun Jul 22, 18 4:37 PM
Thanks for your post. I just started learning about options and this gives me something to think about.
Shawn_McCune Jul 22, 18 11:16 PM
I only trade options now, because they are the penny stocks of blue chip markets. All the volatility of penny stocks without the corruption of pump and dumpers.
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Visa has been on a roll right up to earnings on 7/25. All the financial segments are killing it. Plus it got an analyst upgrade to $165 from $140. Consider the 7/27 call options. On a side note: a $2 straddle on right before earnings would be a really really really good idea on 7/27 options. The premium should be pretty low, like $0.25-$0.5 because expiration will be sooo close. With a $2 move in either direction you’ll make min of 25% on your trade. I say MIN, because the one option will drop to 0, but the other one will just keep climbing. It will only take a 1.4% move in the price to make a $2 straddle profitable.
I am an options trader. I did the penny stock thing, made some money, but became incoherently frustrated that I could never find shares to short...especially when you KNOW the price is going to tank. So, I made the switch, because “put” options are always available, and now I can short to my hearts content. The obvious dowside is that penny stocks don’t have options. There are many other reasons I prefer options, but that’s a discussion for another day. Good luck all!
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prasky Jul 15, 18 10:15 AM
I find that completley dependant on volume. I prefer to watch stocks with a float that is under 100 million but if a stock has volume that can be impressivly half or more of the float it's worth "watching".
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Shawn_McCune Jul 15, 18 10:42 AM
I agree with prasky about the volume, but 20-25M is a sweet spot. You want the ownership of the stock to completely flip during a heavy day of trading. The more times it flips, the higher it will go. By the way, the high float is a key indicator of a shitty management team. It usually means they’ve had quite a few public offerings to keep their doors open.
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axhtrader Jul 15, 18 2:55 PM
Agreed, float alone is not enough. It depends on volume, price action and the chart. Also % of shares owned by institutions can indicate whether the price action will be "inorganic" if that makes any sense...
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axhtrader Jul 15, 18 3:00 PM
Basically "lower float + high volume". All my scans are on TOS and I filter for less than 40M Shares Outstanding (float + unavailable shares to the public).
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Shawn_McCune Jul 15, 18 10:53 AM
Hey Tom, can I make just one suggestion about documenting your goals? Get a PHYSICAL pad of paper like one of those really small ones a cop has...and write your strategy on that for each trade. And you might ask, “why does it need to be actual pen and paper?” A: For the same reasons that people who spend cash, waste less of it than people who use debit/credit cards. The paper makes it real. I’d just keep it simple with the particulars: In, Projected Out, Position Size, Reason for Trade. Also, I’
Shawn_McCune Jul 15, 18 10:55 AM
Also, I would make it a rule to not trade without your pad, as a lesson in “Being prepared to trade.”
TomKob11 Jul 15, 18 11:02 PM
@Shawn_McCune thanks for the tip but i actually already use sticky notes like crazy, i write down the stock, some info and what setup it fits, but i do need to work on writing my specific plan in terms of risk/reward, sizing and my plan to scale in/out
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@Shawn_McCune just became a fully transparent trader today!
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