1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.
I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.
I Hope this helps,
Juan
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AMZN triggered my system back in July 27th. At the time, I entered a trade, but I have to tell you that this is a fictitious trade to illustrate how the CRC is supposed to make you good money, even if the stock does not go up significantly, but rather stays in a rather violent up and down motion. As you know, I DO use contingency order to stop loss, and they would have been triggered here. Also, note that the "rule" of selling shorts as taking profit on the day of earnings is a good strategy, but they cannot protect you from significant drops.
This is the position I would have taken on AMZN with $10,000 to spare.
Enter on the day of the jump, as it triggered my system with a lot of potential for further rally.
After an explosive move, I decide to take some profits, by selling AUG 45 calls, about 1/4th of the existing shorts. That is not too much, as I am still bullish.
One week before Aug. expiration, I examine my trade and see that the stock is moving lower, so I extend my shorts (all 25 of them) to Sept. My cost has been reduced to $7575.
One week before Sept. Expiration, I do another rollover to Sept. AMZN seems to be ready to jump again. My position should be able to collect good profits in a strong move up.
October, 1 week before expiration. Despite AMZN's erratic move, we have managed to get a good profit, even without a stop loss, just by rolling over shorts and increasing the shorts on strong moves up.
On the day of earnings, I protect at least some of my profits by selling more front month calls, without closing the door on a potential jump on AMZN.
Of course we all know what happened, but assuming that you held (like some did), we would be now close to Nov. Expiration. This is what the trade would look like:
5 comments:
Juan,
I thought I had loaded something earlier, but it is now not showing.
What about 'testing' out this approach on a coupl of the trades you are now on, or are going to trade next. As the trade develops, use this process of 'locking in profit', by selling more front months to 'reap' the rise in either volatility or price increase during the a 'surge' which is peters out, and can be detected using an oscillator.
Hi Juan,
Would you be kind enough to comment on this CCRC on MRVL? It will be certainly helpful.
http://platinum.optionetics.com/cgi-bin/platinumv30/op4email.php?trade_name=MRVL|Dec05-Feb06|55|Call|Paper|CCRC&trade_date=2005-11-18&sym=UVM&num_legs=2&tra0=-5:L05:55.000:3.700:MRVL:2005-11-18:45.79600143:FFFFFF:0:0&tra1=10:B06:55.000:5.600:MRVL:2005-11-18:41.11000061:FFFFFF:0:0
Good trading!
Jack:)
http://greeksman.blogspot.com
Thanks for joining us greeksman.
Be sure to tell your friends about us. We all want to learn together and try to establish a reliable, consistent system to get into trades and get out of them without much loss, hopefully.
MRVL has certainly triggered my system today, but because it is reaching new highs, I would prefer to do a PCCRC, rather than a CRC. If you'd like to wait until next week, when volatility begins to reverse, I will describe the PCCRC, and how it is entered, so you can follow along.
If you already entered this CRC, this it a good trade. Also, consider going slightly out of the money and do 60's rather than 55's. That would give you larger profits, but more risk because a snap back down may affect OTM's more than ITM calls.
If you have access to a 60 min chart, you may want to enter the trade when stock as moved sideways, and the stochastics give you a buy signal. Again, that is another alternative.
Thanks, Juan. Certainly your trading blog has been spread out in Singapore (where I am based).
This is a paper trade only as I want to grasp the concept after reading your paper. And I will never risk any real money until I fully understand what I am doing.
Thanks for your comments and I hope you will help me out of this trade so that I can learn something.
Good trading!
Jack:)
My AMZN CRC is acting funny in that my short side is losing more money than my long side is making. Must be a problem in when I entered the short part. The stock's been doing well but I'm not doing as well with my position as I should
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