AMLN is finally showing relative strength, and an apparent buy signal in the Stochastics Oscillator. I am placing a trade with a strike price of $30. I may have to change that to 32.5 due to the limited funds left in the account. I will report back at the end of the day.
There is no $32.5 strike price on AMLN, so I was forced to place the trade at 4.8 and hope for a pullback, which in fact occurred, and my trade was filled:
I have placed a contingency order to close the position, if it falls below 27.5, based on the chart below:
8 comments:
Certainly seen a rise today. I put the Buy 2 $30 Call Jan06, sell 1 $30 Call Oct05 in Platinum and got at $5.70, but the trade in IB when I got on was $6.10, now $6.00. So I shall watch this one too.
DE and BBY are both doing well. DE looks more of a mover as you suggest in your charting...
Looking forward to your update.
Juan,
There aren't any $32.5 strikes on this one.
As I previously indicated I put the Buy 2 $30 Call Jan06, sell 1 $30 Call Oct05 in Platinum and got $5.70. I am in at $5.70, perhaps I could have shaved more, but at the moment I am happy with the trade. It definitely has potential this one.
To reduce the cost of my, I entered the sell order with Nov 30 calls. that helped me to fit the cost to my current cash position.
Juan,
You were right about SGR, it has just hovered with out any movement. A good ‘call’ there on SGR, as I have been watching it.
I did consider selling the Nov05 $30 Call on AMLN as well, but I can roll it forward as and when, and if I want to. It would be interesting to see your price projection on AMLN using the ‘Elliotician Graphics’. Thanks again.
Juan,
SGR was indeed an interesting case study. You still would have made money due to volatility, but would have questioned on whether you could have got out of the trade safely.
Fortitude,
I am still doing a comparison with OTM butterfly. Shall comment on it when both you and Juan exit the trade.
Let me say about the PRC or CRC, that you can transform them into calendars by adding shorts to match the number of longs. I'd tend to leave the trade, rather than transform into calendars. I like the idea of an unlimited gain in either direction. Take AMLN as an example, would we had made as much money if we had placed a OTM butterfly on AMLN, or would it have gone past our range?
Assuming that you use the triggers in the Sarmiento System, the expectation is for the stock to go strongly up or down (as it was the case with AMLN). Entering the trade with the expectation that it will go to a specific spot at a specific time is very troublesome for me. Thus, in the lung run, one can get really frustrated with the OTM butterflies. I have shown, so far that using PRC and CRC can go wrong, but with the stop loss we can have a limited loss. Look at AVID (so far not turning out too good) and CREE. My losses have not exceeded $500 in either case.
Hi Juan:
Your point is well taken. In OTM butterfly you don't have to get out using a stop loss. For e.g. if your stop loss is $500, then that is the debit which you will use to purchase OTM butterfly. However, with OTM butterfly the delta is small and the rate at which you make money is slow. It is good for big moves like AMLN. Even if AMLN passed the range you would have still made the money.The reward to risk ratio is high. However, some people prefer OTM butterfly if you dont want to watch the trade everyday.
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