W/O or Printing Press

I bought 500 shares of WLT @ 13.88. I sold the $16.00 Oct call a few minutes ago. Here we go!!



Edited 1 time(s). Last edit at 10/15/2013 09:26AM by Darcy2.

Darcy,

Based on your title, it looks like you haven't decided if you want to keep this stock or not. GW says that if you are doing PP you wait for a reversal signal (he says on the Daily, but then he later says the 55 - so I'm not sure what the rules are - it seems a little late if you wait on the Daily - what do you think?) to sell the options just above the price you paid. Based on where you bought and where the current price for WLT is, it looks like you are doing W/O this time. Also, I don't see any reversal signals on WLT that would lead you to sell the options at this time.

I bought 20 shares of AAPL at about $489 a few days ago, and the stock is now up about 2% since then. If I sold mini-options out into November I would surpass 5% for the month, but I'd like to do PP on this so I can focus on one stock instead of constantly needing to look for a candidate to do W/O on. My challenge is knowing at what point to sell the options. Based on GW's rules, I need to wait for a reversal - as stated above. This would provide a decent check while providing downside insurance for when it pulls back.

Feedback and input are greatly appreciated.

Nope it really didn't matter to me if I kept the stock. I am expecting a pull back based on the 233. I've been practing this stock for a while. I finally bought real money. If I get called out I will buy it back when it dips below $14 again. WLT hit triple bottoms around end of June and again the first part of Aug. If I sell out I am okay with that, I will play the puts.

I would sell my AAPL using the gaps I have mentioned on the daily chart. AAPL has strong resistance on the daily between $513 - $508/$507. I haven't been called out on it yet and that has been since Jan.

You can't sell you AAPL shares yet on W/O or Printing Press. You have to own at least 100 shares to do this. Maybe you meant you bought 200 shares not 20.

I haven't really followed GW's rules on W/O or Printing Press. I simply sell calls against the sock when the levels on my gaps are reached. I bought WLT because of the multiple bottoms on the daily...and the stock bounced up off those bottoms. I have noted that when I do it "my way" I need more than 100 shares. This is why I have started with WLT first. I like WLT because it has really good volume.

Darcy,

AAPL is again very close to that significant resistance level. So I went ahead and sold 2 mini-contracts when I saw the price pulling back this afternoon. The mistake I made was to sell the Nov contracts for $21.05 instead of Nov Wk1 for $19. Now my money is tied up for a month to gain $2 on 20 shares. I remembered that right after I was filled. But if AAPL does pull back and stall a good amount, I'll just buy those back and be ready to sell again. We'll see what happen with the iPad announcement and earnings release.

There are a very small number of stocks (GOOG, AAPL, and AMZN, I think) that now have "mini-options" - meaning they control 10 shares instead of 100. They are available through OptionsXpress and Options House, I think. Probably everywhere else, too.

I, uh, do not (yet) have money to purchase 200 shares of AAPL - but that is certainly my goal/desire. It seems that the options prices are comparatively higher with AAPL compared to a lower priced stock. So even though a rise in price of only $10 on 20 shares isn't much, when you throw in another $10-15 that you can gain on the option, that gets you pretty close to 5% for a month. Sure I'd love more than that, but my goal is to be able to consistently nail that amount month over month year over year. The math is in your favor even without adding outside funds to the W/O (retirement) leg.

Kars,

I suppose mini options work like the others. I really do not know. I understand about buying 200 shares. That will take some big bucks. That is my goal to own 200 shares and use the Printing Press.

As far as I think...just thinking...I am not expecting WLT to hit $16 but if it does and I am sold out that is fine. I agree your error was selling Nov. What I did with AAPL was use the weekly options and would sell on a Thurs most of the time. Once in a while I would sell on a Wed. That way I was not call out. I would go by the 233 and daily looking at the gap and the Stoch RSI (over sold position) AAPL has changed since 9/12 because the 200 moving average crossed below the 50 moving average. This has become a stronger support See the weekly chart dated 4/14. 4/21 and 6/23. This could possibly be a triple bottom.

If AAPL breaks the strong resistance I have mentioned it will still have some resistance off the gap of 12/31/12 and 1/02/13. But I go not expect to see this happen this week. AAPL is over sold in Stoch RSI on 233, daily and the weekly. Just my 2 cents.

I'll practice the mini's and see how I do. Good luck!



Edited 1 time(s). Last edit at 10/16/2013 06:23PM by Darcy2.

Morning everyone,

I'd like to know more about those "mini-options" also. I'd love to trade on those big boy stocks but the contracts are just to far out of my range right now. Usually I have to focus on stocks under a 100 bucks simply because the options are in my range.

Sure I could do just one contact. For me though I'd prefer the volume even if it only moved a little, instead of waiting for one contact to have a large movement. Sure it can happen, but when the stock gets choppy it tends to shake me out of it. I'm I making any since here, I haven't had my coffee yet:-)

RichieRick,

One should never post before morning coffee!

You make sense. I do not know anything abut the mini's but I will begin practicing with them. As far as the big boys the closer to expiration Friday you get the cheaper the options after Wed of expiration week you need to be alert. S/O trades all the way through and includes expiration Fri. as long as the move in the market is fast and strong...which we do not have right now. I do not. By Wed of expiration week I am looking to the following month or to the weeklies #2.

Mini's are simply blocks of 10 instead of 100. THey move penny for penny to the traditional option. THey were designed for the investor that couldnt afford AAPL options. Great way to get started with stocks that move.

Thanks for the input on the Mini's

Question though...

Ok, so the mini's cover 10 shares in a block instead of 100 shares. That part I'm clear on... I think:-) The question is, if I bought 10 contracts of the mini's would it be the same price as 1 contract of the "regular" option?

I'm not saying I would do it, but was wondering if it's broken down that way.

I would assume that is correct.

When I traded APPL (almost exclusively), I bought mini"s. That is all I could afford.

I had a successful Big Chart Trade, but it is not one I am extremely proud of. I bought FB a couple of weeks ago based on a lot of intuition and small amount of charting techniques. I recently bit the bullet and subscribed to Briefing.com again. I watched the charts and saw FB had blown off some steam, during this political mess that we were experiencing, but I also knew it would come back. I found that someone bought like 22,000 out of the money Nov. call contracts. I also noticed the volume stayed really strong. I had a few good trades, prayed about it, and decided to test my patience and bought out until Nov. I was also prepared to lose it all, but I felt so strong about the trade based on so many elements that dealt more with art rather than science. I gained over $6 on the trade, but while in, it took a drop so low, and my account was falling off the cliff, but I rode through it because again, I knew when or if this shutdown stuff was over, the stock would scream. Obviously, it ran hard after the chatter of shutdown came to an end.

I had no idea FB would ride the coat tail of Goog, so I stayed in the trade- not knowing what it would do after Goog reported. This part of the trade was totally a blind man's luck. I would have been an absolute fool to not take profits after the stock jumped another 2+ on yesterday. I waited until that little pop at around 10:15 yesterday morning, and sold, topping my biggest profit. I will have to state that briefing was well worth the money that I spent reinvesting in this service. It is $65 a month, but there were little tidbits I picked-up that gave me confidence. My humble opinion is, FB could be a really good trading stock for the Fall/Winter. When the company announced that they can justify how they make money, things changed for this company/stock. I will definitely keep my eye on it, and if nothing else, I will snipe this stock as many times as it stands in front of me.

I gained a lot of strength from this trade for a couple of reasons. Of course it was my biggest trade, but that was only a fraction of what made me feel all fuzzy inside. I was able to snipe other trades intraday as the big chart trade was doing well. I was able to make twice as much money in two weeks as normal because of the mergence of the two trading styles. I have not seen many intraday trades over the past couple of weeks, but again, sniping and invasion was good, although that process might have been a one time deal. I am not a runaway renegade. My investment in FB was not a lot of money, but again, it was money I was willing to and could afford to lose, if I totally missed it.

I chose not to give the specific about the trade because it is one that again, I am happy with the results, but I am definitely not going to recommend anyone ever trade a stock based on my approach to the FB trade. I am also not cocky enough to feel I have learned how to trade bigger charts. The point for this post is convey how a live news feed can be the key some trading confidence and help raise immediate awareness to what is going on politically and financially. I am not a salesman for briefing, but I could not find anything that came remotely close to what briefing provides-NOTHING!

Still own WLT. Made about $98.00 and still own 500 shares. So I will repeat this technique again next month if it looks like I can. I was fairly sure WLT would reach $16.00 and then fall back but either way I would have been happy with my Printing Press or even a W/O.

Now here's what I am thinking...(no not dot, dot, dot!)

From looking at my charts I think WLT will eventually test the waters again at around $16 or so. If it looks that way again I will STO 5 contracts if it is above my purchase price of $13.88.