Peak Play

I watch my 21 chart for Peak trades. For me to trade a Peak Play the candles have to be out of the Bollinger Band on the 55,34, and 21 otherwise I do not trade.

As the candle grows smaller and is outdide the Bollinger Band I watch the 3 chart to enter. I do not risk trying to take my Peak Play to a high profit. $200 - $400 is my general range unless I am getting a huge continuous down candle and my studies confirm more down movement. If it is slow and the candle fluxuates up and down I get out of the trade...Happy in Seattle.

So this morning BIIB popped out of the BB and I entered the trade.

Result:

BIOGEN
07/23/2014 O STC BIIB Aug14 345 Put 3 $14.30 $14.95 $4,274.84
07/23/2014 O BTO BIIB Aug14 345 Put 3 $12.90 $14.95 ($3,885.06) 389.78
Total Realized Gain/Loss for BIIB $389.78
Total Realized Gain/Loss $389.78

BIIB is still going down but when I exited the candle was tuning white...I don't risk a profit.



Edited 2 time(s). Last edit at 07/23/2014 09:26AM by Darcy2.

If I understand your data correctly, you were able to buy 3 contracts at the bid and then sold them later at the bid while the ask price did not change?

No. I bought at the ask and sold at the bid.

BTO= Buy to open
BIIB =Stock
Aug14345 Put= option
3 = contracts
$12.90= cost per contract
$14.95 = cost of trade total which includes the cost of trading 3 contracts $3,885.06

BTO BIIB Aug14 345 Put 3 $12.90 $14.95 ($3,885.06)
-----------------------------------------------------------------------------
STC= Sell to close
BIIB= Stock
Aug14 345 Put= option
3= contracts
$14.30 $14.95 $4,274.84 = cost of trade after selling

STC BIIB Aug14 345 Put 3 $14.30 $14.95 $4,274.84
------------------------------------------------------------------------------

Profit for BIIB Total Realized Gain/Loss for BIIB $389.78


For the day = Total Realized Gain/Loss $389.78

If it was a loss it would read ($389.78)

Thanks for clearing up my confusion.

Does BIIB easily cover it's rather substantal option spread

Obviously it did cover the spread in Darcy's example. I guess it depends on your style of trading. If you are an in and out / quick hit it and quit it type then BIIB may not be the best play as it takes some movement to cover the spread. Earnings volatility helps. A 2 to 5 day swing trader can expect moves of $10 to $20 or more that should more than cover. I have very little experience with BIIB but have traded REGN that covered pretty quickly if you hit the right entry. I have covered a $2 spread in less than 10 minutes but my comfort level with respect to the spread is around .20 to .30

Thats why i love them q's! .01 spreads if you trade near the money

mtut Wrote:
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> Does BIIB easily cover it's rather substantal
> option spread

I do not generally trade Pharma. But I do like PEAK trades liked we learned from GW in 1-5. It is generally a one or two candle trade on a 21 chart. When I do a PEAK trade I like my candle to be out of the BB on the 55, 34 and 21 chart with a red candle starting to show on the 21. This is generally when I jump in. As soon as I start seeing a white candle forming (generally on the 21 and generally after the red candle close) I leave the trade if my 8 chart says get out.

I traded BIIB because I could clearly see I would make a few hundred bucks. Generally fast ups brings fast pull backs. However I seldom do slams because fast downs generally give me slow sideways.



Edited 1 time(s). Last edit at 07/25/2014 08:59AM by Darcy2.

dPmunky Wrote:
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> Thats why i love them q's! .01 spreads if you
> trade near the money

I agree a .01 spreads seems nice but you have to buy so many options. A slight shift in your trade can cost you many $'s unless you enter right on the button. Generally a .10 shift in something like LNKD doesn't hurt like a .10 shift against your option in the Q's. S/O trades the Q's. BTW VZ also has a .01 - .03 spread and I like it much better.

agree, i usually use the q's to trade on short charts and look to close on a .10 move in price. .03 for commission .07 for me on 10 contracts and i'm out! I'll have to put VZ on my watch list and get familiar