Copy this URL and paste it into the address field of your browser.
http://www.pathometrix.com/Movies/AAPL3.mov
This is s quicktime movie, so if you don't have quicktime you will have to downloaded from Apple.com. If you have an iPod, you probably have quicktime already. if not, here is where you can get it:
http://www.apple.com/quicktime/mac.html
I have previously posted 2 clips on AAPL.
http://www.pathometrix.com/Movies/AAPL.mov
http://www.pathometrix.com/Movies/AAPL1.mov
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13 comments:
Comforting in regard to AAPL, thanks! Looks like AMZN might be perking up? Any thoughts?
Nice blog, Juan Sarmiento. There's an interesting site about trading knowledge at trading knowledge.
Juan: When RIMM opens it will be down and going down, due to bad news from the courts. Theyre trying to handle it with press releases before opening trading. I'm wondering if one should take the gains if there are big gains soon after they open, before any possible bounce. What do you think?
It is not a bad habit to take profits quickly when playing PRC's, short sellers tend to take profits right after a big drop.
Having said that, I am keeping my position.
Both short
http://stockcharts.com/def/servlet/SC.web?c=rimm,uu[w,a]daclyyay[db][pb50!b200!f][vc60][iUa12,26,9!Lp14,3,3]&pref=G
and long-term
http://stockcharts.com/def/servlet/SC.web?c=rimm,uu[w,a]waclyyay[df][pb10!b40!f][vc60][iUl14!Lp14,3,3]&pref=G
RIMM looks bearish.
One thin you can do is to sell front month options, as they reduce your risk (profit taking), in case of a short-term bounce.
Take a look at my RIMM chart, I stand by it still
http://homepage.mac.com/paperprofit1/.Pictures/RIMM/RIMM1.gif
I know your TA shows the liklihood of tremendous gains. What I'm concerned about is that this drop is due to a law suit, and these things can reverse on a dime. They just got a negative ruling. I'm not terribly familiar with the details but I think they could get a runing in their favor at some point and the stock could go up very fast, making it hard for us to exit. These spreads are a little harder to exit than a true single position and options seem to sometimes also be harder to exit than shares are.. what with the spreads and such. I'm still thinking of closing around EOD for that reason, because I think we were lucky to get such a quick response A moderate profit in my case. One thing I could do is close half since I have 20 long and 10 short. I'm pondering.
Accountholder
All I can do is to tell you what I would do, but then I seem to have a still of trading that is different from yours.
No matter what I tell you, you'd still follow your instincts, and that is always better than any TA, IMHO.
Selling front month puts on RIMM is a way to take profits while keeping your position. This is why I like PRC's, rather than plain puts.
Another thing that I do different than you is to cover several stocks at the same time, that way I do not get too attached to one position in particular.
I think that you could spread the risk by having more positions, some bearish some bullish, some short-term, some long term.
Buying and selling stock will always be much easier than options and that easier than options spreads, but you can always close the position at the market price, or at a limit price right at the current bid, and it will be done immediately. Avoiding unliquid stocks (<1M shares traded), is a good idea because that lack of liquidity is reflected in the bid/ask spread in a position.
When a stock drops like RIMM did today, the PUTs jump in volatility, particularly the short-term ones, so selling those brings more profit than closing 1/2 of the position, IMHO. By closing 1/2 of your PRC you are BUYING the front month options BACK, which are likely the most expensive at the time the news come out. In fact, the IV on the Dec. 60 puts is 65%, the IV on March 60 puts is 56%. That is a difference of more than 15%. People that trade calendar spreads based on volatility skews recommend that you sell front month options that have an IV of 15% more volatility than the options you are buying (or holding). Selling front month puts would be perfect in this situation because if RIMM stalls here, they could expire worthless if the stock closes above 60 on Dec. expiration.
Juan: Mine are the 65's not the 60's so they are well in the money and for them to expire worthless the stock would have to be over 65.
I didn't do anything on them today. I might have sold if it had stayed down near 60 but people where covering shorts or were just buying, so the stock went up before the close and I thought maybe we'd get more of a down day tomorrow as more of the bad news gets disseminated.
Juan: Mine are the 65's not the 60's so they are well in the money and for them to expire worthless the stock would have to be over 65.
I didn't do anything on them today. I might have sold if it had stayed down near 60 but people where covering shorts or were just buying, so the stock went up before the close and I thought maybe we'd get more of a down day tomorrow as more of the bad news gets disseminated.
got an empty email from you, Juan. :)
AAPL, I love you! I wish all stocks were like you.
well, we have identified a few winners including FDX, BRCM, SLAB among others.
If you chose the right position and learn to hedge your positions, you will always make money while minimizing risk.
I took a position in BRCM recently, maybe a little late. I took May 47.5 long, 20 of them, at 5.20 and Jan 47.5 short, at $2.60, 10 of them. I have a $600 profit right now, on paper.
I think I'm more comfortable with long positions right now. Which one or ones do you like best for a long position next week? I'll take a look. Tempted to just add to AAPL, but I guess I should wait for that pullback. Still see it coming at 75?
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