Options: Low Cost Investing

[Adam]

Couple of good GOOG support option plays:
Feb 06 $600 strikes for $1.00
Feb 06 $630 strikes for $0.75.

Cheap and limited downside. If it bounces here at gap support and trends nice it will pay real nice.

Yesterday I picked up GOOG FEB 06 $600 call @ .95 then missed a buy in at $.50 while the stock ran up 30 pts. Love the mixed up way options move. It was up almost 100% at one time today. If it trends from here it would be nice!

[New-born baby]

NBB,



You probably know about these, but, just in case.

I ran into two Exchange Traded Funds, IGA and IGD.

Here is part of the IGD Investment Objective:

The Fund's primary investment objective is to provide a high level of income. Capital appreciation is the Fund's secondary investment objective. The Fund seeks to achieve its investment objectives by investing in a portfolio of global common stocks that have a history of attractive dividend yields and utilizing an integrated options writing strategy.

The current yield is 10.93%.

http://www.etfconnect.com/select/fundPages/global.asp?MFID=142101

Tim

Tim,
Sorry I missed this post until tonight. I was very busy and missed a lot of action, and just this week have been back with my nose to the streamer. But to answer your question: no, I did not know about his fund. 11% is okay! Thanks for the post.

[New-born baby]

NBB,

Got in the money JLGEJ may $50.00 options. Up 37% at this point. The chart looks strong as well as the #'s. Your opinion would be greatfully appreciated.

Thanx

Adam

Adam,
I like JLG. Chart looks strong, and today it had a nice bounce off the 10 dma. Those May $50 calls are selling for $5.40 by $5.70 right now. Here's the only issue I have with it: I don't know how high she may run. She's definitely a winner for you; the daily channel looks to run to $53+ and rising; the weekly perhaps $60+and rising on the major channel; $53 on the minor. It appears to me that JLG is at an all-time high, so it has entered the Twilight Zone, and no reliable target can be forecasted.

So what I am trying to say is that this baby is running nicely for you (LOOK at those STOs run!), but I am unable to give you a price target. I wish I could say that the formation points to $75 or some such figure, because that would give you a good idea about how long to hold.

What is your plan?

[spikefader]

Couple of good GOOG support option plays:
Feb 06 $600 strikes for $1.00
Cheap and limited downside. If it bounces here at gap support and trends nice it will pay real nice.

Was a little early on the call but still potential for a pop to $3.00 over the next week should GOOG rally to test the high of 475.00...

[spikefader]

Yesterday I picked up GOOG FEB 06 $600 call @ .95 then missed a buy in at $.50 while the stock ran up 30 pts. Love the mixed up way options move. It was up almost 100% at one time today. If it trends from here it would be nice!

heh, ya options sometimes act very wierd. Good luck with it!

[Adam]

Adam,
So what I am trying to say is that this baby is running nicely for you (LOOK at those STOs run!), but I am unable to give you a price target. I wish I could say that the formation points to $75 or some such figure, because that would give you a good idea about how long to hold.

What is your plan?

Hello NBB,
WOW that would be beautiful to see a number even close to $60 no less a number like $75. Thanks for the intrest in this position.

My plan at this point is to keep a close eye. It ran up to $6.30 a day or two ago then back down to $4.40 I bought in again bringing my averadge to $4.70 because it bounced off the $4.40 realy quick. I have some time left to watch, maybe a month comfortably. Not a ton of liquidity in this one. I'll watch for another run up. If it goes unprecidently good and runs 100% I'll take all invested capitol off the table and let the profits ride till closer to expiration, see how it goes. If I feel weakness I'll put a stop order in to secure profits which I'm up 20% plus at the moment, or I'll look to start taking profits at 40%. Last time I started Taking profits on some GLW call options @ 40% ended up selling the last blocks at 90%. I expected the weakening after the early year runup. That propmted that profit taking. JLG has held pretty strong through everything so far. I hope this trend continues.

Do you have a set of sell rules for how you trade in options?

Also I was looking at GM for maybe a small short term put option play. Any thoughts? I think I saw that somewhere on spikes thread? Spike?

[Adam]

Adam,
So what I am trying to say is that this baby is running nicely for you (LOOK at those STOs run!), but I am unable to give you a price target. I wish I could say that the formation points to $75 or some such figure, because that would give you a good idea about how long to hold.

What is your plan?

Hello NBB,
WOW that would be beautiful to see a number even close to $60 no less a number like $75. Thanks for the intrest in this position.

My plan at this point is to keep a close eye. It ran up to $6.30 a day or two ago then back down to $4.40 I bought in again bringing my averadge to $4.70 because it bounced off the $4.40 realy quick. I have some time left to watch, maybe a month comfortably. Not a ton of liquidity in this one. I'll watch for another run up. If it goes unprecidently good and runs 100% I'll take all invested capitol off the table and let the profits ride till closer to expiration, see how it goes. If I feel weakness I'll put a stop order in to secure profits which I'm up 20% plus at the moment, or I'll look to start taking profits at 40%. Last time I started Taking profits on some GLW call options @ 40% ended up selling the last blocks at 90%. I expected the weakening after the early year runup. That prompted that profit taking. JLG has held pretty strong through everything so far. I hope this trend continues.

Do you have a set of sell rules for how you trade in options? The tradining is very different than stocks. If I tried an 8% stop I'd be stopped out constantly. Recommendations anyone?

Also I was looking at GM for maybe a small short term put option play. Any thoughts? I think I saw that somewhere on spikes thread? Spike?

[New-born baby]

Adam's JLG

Adam,
Below is a 10 year chart of JLG. It may surprise you that JLG has busted out of a ten year cup with rising handle formation that targets close to $75. BUT remember, that is a TEN YEAR formation that takes perhaps two or three years to get there. Your options are not that long term But at least you'll know this stock has potential.

When to take profits. I don't know. Market conditions will no doubt rise and fall in the next two months. There just has to come a time when you take the profits and say to yourself, "I am happy with what I got." Greed will make you unhappy no matter what happens now. It is never satisfied. Others may give better advice.

If it were me, I would consider these things:
1. When does JLG report earnings. Doesn't matter how good they are, JLG may fall. If they are not "blow out" earnings, she may pull back some. Find out what date that is.
2. The channel points to $53 and rising. I'd be taking some off of the table at that point, esp. if the market continues to rise in fear.
3. Remember: Pigs get slaughtered.

Here's your big cup:

http://img93.imageshack.us/img93/3001/chart14ns.gif

[New-born baby]

GM option play

Adam:
GM reports on Thursday, Jan 26. What are you thinking? Bullish, bearish?
The formation is bullish on the chart. The Inverted S~H~S targets $28+. What about selling the $20 put? Or the $22.50 put? Buying the $22.50 calls?

[New-born baby]

Vlo

And easy 5.4% could be had this morning by buying VLO and selling the $60 FEB Calls.

[DSteckler]

<< What about selling the $20 put? Or the $22.50 put? Buying the $22.50 calls? >>

Easier to buy calls than sell puts. Net worth and income requirements are higher for the latter.

[Adam]

Hey NBB I must be reading something backwards on the GM. Took the trade out of the question early this morn. I was thinking bearish as they are cutting jobs and slow sales? My tecnical linguistics and vocabulary are very simple. I understand 50% of the abbreviated technical info. Sorry if I disapoint. I do the best I can with the education I got myself. I'm weary of selling the put options only because I haven't studdied it enough. Inform me if you can but don't you have limited control when you write options versus buying puts and calls? You can be assigned to pay if someone exercises thier contract at any time?



JLG It just keeps going. I do feel it can produce a good 40% plus in the next month. Given fair market conditions if it hits 53 I'll be over 40% and happy to take the profits. If there off there triple digit earnings it can take a pull back. May options don't give me much time if earnings fall short. Any new highs should get it To the 40% profit and give a chance to sell into the strength. Thank you for the heads up on the areas to watch. If the market turns up it will be a tuff call but being a pig has cost me tremendously. I'd love to get your input on it but I'm to embarrased to say it on the open forum.

As always good stuff from great people!

Thanx

[New-born baby]

Adam

You can always send a private message.

[New-born baby]

Inform me if you can but don't you have limited control when you write options versus buying puts and calls? You can be assigned to pay if someone exercises thier contract at any time.

I'd love to get your input on it but I'm to embarrased to say it on the open forum.

Thanx

You can always send me a private message. I want to see you make the $$.

And GM is not bearish on the chart. Thursday, 1/26/06 is very important day. GM announces earnings. Watch the action. The chart calls for a move up to $28+, as I wrote earlier. Just look at the price action this week. GM up over $1 every single day. That's not bearish . . . GM headed into a .50 divy on 2/8/06. Institutions are buying the stock to take the divy.

I have been watching JLG since you mentioned it. It has been one hot stock. Eventually the momentum (called "the momo") runs out, and like all things that go up, they come down. But long term, JLG looks great.

[spikefader]

...was looking at GM for maybe a small short term put option play. Any thoughts...Spike?

lol don't ask me! I was way wrong with GM this week. Doh!

TA-wise, now that the daily channel short day at 22.78 has been taken out, and now the weekly SHS neckline taken out, and the weekly channel short candle high of 20.65, it may meander its way up to 29.00 and 31.00. I'd have to take a neutral bias on it right now.

New-born probably feels like giving me an uppercut for the read I gave! I think he mentioned he was positioned bullishly and I fear I swayed him Sorry NB! ~sticking chin out for an uppercut~