Thursday, July 28th, 2016

Stock Option trading


The month came in like a Lion and went out like a lamb. Net effect not much. Markets are trading in a range after stock markets major declines from last year, building confidence, and a floor, perhaps from where markets may launch higher. There was no shortage of bad new all month long. Lots of bad news, yet the markets failed to crater or sell off in a nasty waterfall fashion like last year. We are consolidating here in a sideways pattern, SPX, NDX, OEX and all major indexes doing the same. This is obvious to anyone, just look at the charts.

Meanwhile Obama is omnipresent. He is on TV everyday and keeping this doom and gloom crowd at least perked up, and they can keep their heads above water. Obama’s stoic leadership has been a boon to stock market even though Wall Street hates him. Its good to see someone in charge and keeping it all glued together. This is one of the main reason that stock market has shrugged off bad news by the truckloads, and did not sell off, or crashed, as there is a ray of hope for the future. This week’s GDP numbers and jobless claims were dismal at best. The economy contracted 3.8% last quarter and a full blown recession is underway. Things may get ever worse, as Obama predicts ,before they get better. Who knows how long it will be when we go back to bullish mode again. Till than lets just scoop what we have.

Since major indexes are trading in a range, we have been out in full force selling option premiums. December was a very positive month for us and so is January 2009. Those two back to back positive months have been great achievements from last year. We are still trading with caution, small positions and fewer trades and only firing few cylinders in the whole machine. Our option selling trades in this range bound markets have been successful, so far. This can change on a dime and we are prepared to take evasive actions.

Stock option trades on CHK and KO have at least 20% profits and can be closed since they were placed right on expiration day and time has passed. Our Google trades is still doing fine, but needs to be adjusted soon.

IF you have not subscribed yet please do so, there is money to be made. You will get weekly updates and timely emails and hopefully you can have a better year in 2009.

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