Options: Low Cost Investing

[dmk112]

What do you guys think about BIDU 105 july calls @ .40?

It broke out niely and holding up in this crappy market.

[spikefader]

What do you guys think about BIDU 105 july calls @ .40?

It broke out niely and holding up in this crappy market.

Yeah dude. I like the limited risk in that kind of play.

[New-born baby]

What do you guys think about BIDU 105 july calls @ .40?

It broke out niely and holding up in this crappy market.

Are you buying or selling? Because I don't think there is anyway that it is going to hit $105 by July. I am sorry; that's just my honest take on it.

[spikefader]

Are you buying or selling? Because I don't think there is anyway that it is going to hit $105 by July. I am sorry; that's just my honest take on it.

I don't think he sells calls NB. I took him to mean buying.

And technically there is a way it can make it. Arguably enough TA to support a long with good r/r. Cheap out of the money calls isn't a bad way to play it, although there are better longs out there of course, but I'd put a bullish bias on this chart. Another bullish thing not noted on the chart is the large island reversal from the gap down in December, and the gap up this month. That's a biggy.

What are you seeing that I'm missing NB? The descending triangle?? and arguably an exhaustion gap on the 11th of this month?

[New-born baby]

I don't think he sells calls NB. I took him to mean buying.

And technically there is a way it can make it. Arguably enough TA to support a long with good r/r. Cheap out of the money calls isn't a bad way to play it, although there are better longs out there of course, but I'd put a bullish bias on this chart. Another bullish thing not noted on the chart is the large island reversal from the gap down in December, and the gap up this month. That's a biggy.

What are you seeing that I'm missing NB? The descending triangle?? and arguably an exhaustion gap on the 11th of this month?

Oh, yes. I knew he meant take it long. And yes, I see the cup with small handle on the weekly, too. If it busts the resistance at $87 on volume it could very easily make that $105 call. My idea is that BIDU has to bust that resistance on volume, and I don't think it will. Instead I am looking for BIDU to pullback here. I don't think market conditions nor the company earnings (news) will allow the stock to move higher. In other words, I think the island reversal is going to fail. The price action tells my gut--boy, is that an indicator for your or what, Spike? Talk about 11 herbs and spices!--that this baby is going to fail. And if the pattern doesn't fail, you've only got about six weeks for BIDU to make a run exceeding $28 to break even. Too far out of the money for the time allowed, imho. I could very well be wrong, too

[spikefader]

....the price action tells my gut--boy, is that an indicator for your or what, Spike? Talk about 11 herbs and spices!...

jejeje Ah yes, the ol' gut indicator. I've used that one many a time too! My problem with that indicator is that my gut 'oscillator' is too closely connected to my hope meter lol

[dmk112]

Need some thoughts... I have SHLD Jun 165 calls... Have some profit on them but I think should have already sold..

[New-born baby]

Island Reversal

Need some thoughts... I have SHLD Jun 165 calls... Have some profit on them but I think should have already sold..

IF you are asking me what I think about SHLD, I see that SHLD is walking right on the knife edge. I am thinking that SHLD will perform what is known as an Island Reversal--she gaps down--if $152.50 fails. From my vantage point, I see that the weekly has the cup, but SHLD has to break that $160 resistance to go higher, and then you have the time factor, and retail always slackens in the summer months . . . so if you have a profit, imho, I'd take it.

You'll have to make the call yourself. If I am wrong, SHLD moves higher and you are kicking yourself that you missed out on the big bucks. But I am bearish on the market right now, and I myself would take the longs off the table until this market proves to me that it is bullish again.

Best to ya, Man!

[dmk112]

Thanks, same thing I was thinking... if the 10 ema gets broken I'm out. thanks

[grebnet]

How to make money of my HOM shares.

Im looking for ideas.
I own a lot of HOM all free that is even if they go to 0 ,I break even having traded for a while. Im curious on your thoughts of using options to make some $$$ against my holdings.

[New-born baby]

Im looking for ideas.
I own a lot of HOM all free that is even if they go to 0 ,I break even having traded for a while. Im curious on your thoughts of using options to make some $$$ against my holdings.

You have many options. But first let me say that HOM is due a pullback.
SO, if you plan to hold the shares no matter what, here's a few play:

1. SELL the JAN 07 $15 calls for $2.20. Current price is $11.76, so you'd be netting a profit of $5.44 (from today's price) for a return of 46%. IF HOM pulls back, you keep the $2.20.

Other options are selling the $15 calls each month, and that gives you some flexibility, but the dollar amounts at this price is very small, and if you sell the $12.50 calls the run the risk of having the stock called away.

[grebnet]

You have many options. But first let me say that HOM is due a pullback.
SO, if you plan to hold the shares no matter what, here's a few play:

1. SELL the JAN 07 $15 calls for $2.20. Current price is $11.76, so you'd be netting a profit of $5.44 (from today's price) for a return of 46%. IF HOM pulls back, you keep the $2.20.

Other options are selling the $15 calls each month, and that gives you some flexibility, but the dollar amounts at this price is very small, and if you sell the $12.50 calls the run the risk of having the stock called away.

Thanks NB
If I sell the Jan 15 calls and the stock pulls back to say $10.50 in the next week, what do you estimate I could buy them back for?

[DSteckler]

If I sell the Jan 15 calls and the stock pulls back to say $10.50 in the next week, what do you estimate I could buy them back for?

That's what delta tells you. If you're not familiar with the greeks, maybe you shouldn't be trading options?

[grebnet]

Gotta learn by asking

That's what delta tells you. If you're not familiar with the greeks, maybe you shouldn't be trading options?

You are right....maybe I shouldnt. Asking doesnt cost me anything.

[Jack Haddad]

You have many options. But first let me say that HOM is due a pullback.
SO, if you plan to hold the shares no matter what, here's a few play:

1. SELL the JAN 07 $15 calls for $2.20. Current price is $11.76, so you'd be netting a profit of $5.44 (from today's price) for a return of 46%. IF HOM pulls back, you keep the $2.20.

Other options are selling the $15 calls each month, and that gives you some flexibility, but the dollar amounts at this price is very small, and if you sell the $12.50 calls the run the risk of having the stock called away.

Based on the current technicals, the 6-month chart is showing a solid support of 5.85, though the short and intermediate terms are quite bullish. On May 16, the gap up from 10.93 to 11.70 is very bullish. If the stock close above 12.50, then it stand s a good chance in challenging the 13.75 resistance. At this point in time, I would favor writing the 12.50 calls over the 15.00 in the event the stock decides to test lower support levels. Earning .65/contract on the june 12.50 ain't a bad return in little over 3 weeks!