Lately I've been buying strangles for my plays and there's a real reason behind this shift in strategy. Markets are pretty volitile lately and an individual stock is hard to play when setups continually get screwed up with an overnight shift in the futures. With the way the markets are looking, either we're setting up for another leg down or we're bouncing...either on could be a big move, I just don't know which way they'll go. Which is why I'm employing the strangle options strategy.
Another reason for the shift is that I'm getting more busy at work. I'm in professional sales and so there's a lot of pockets of time where I can pull out my iphone and have a look at the markets to play a setup. Problem lately (for my stock trading that is) is that business is picking up and if I'm in a trade I can get called away and sometimes the play has come and gone or the market's closed by the time I can look at the charts...so I'm left bag-holding with a nice loss. Going in to a trade with a strangle (or straddle) helps in that I'm now looking for plays that have big moves coming...time frame, however, isn't limited to just a few minutes or hours. I have a little breathing room.
This isn't to say that I won't try to trade something for a scalp if it looks good and I'm in a lull in my work day. Things open up and I'll take the opportunity if its there.
Looking at ZAGG for a strangle (earnings tomorrow after the close) and APA for a long-biased strangle (think its called a strap): 2 at the money calls for every at the money put bought. VRUS is another one worth looking at--setting up for a 52wk break...daily chart shows a pop, pull, retest of 52wk high, fail, but support held and now its trying again. 125 now, test is high 137...who cares if it fails again, might be a $10 run up in the next few days.
Follow the rules: Cut losses quickly; Don't overtrade; Take profits/sell into strength; Don't chase, watch for the pullback; Have a plan and stick to it
Another reason for the shift is that I'm getting more busy at work. I'm in professional sales and so there's a lot of pockets of time where I can pull out my iphone and have a look at the markets to play a setup. Problem lately (for my stock trading that is) is that business is picking up and if I'm in a trade I can get called away and sometimes the play has come and gone or the market's closed by the time I can look at the charts...so I'm left bag-holding with a nice loss. Going in to a trade with a strangle (or straddle) helps in that I'm now looking for plays that have big moves coming...time frame, however, isn't limited to just a few minutes or hours. I have a little breathing room.
This isn't to say that I won't try to trade something for a scalp if it looks good and I'm in a lull in my work day. Things open up and I'll take the opportunity if its there.
Looking at ZAGG for a strangle (earnings tomorrow after the close) and APA for a long-biased strangle (think its called a strap): 2 at the money calls for every at the money put bought. VRUS is another one worth looking at--setting up for a 52wk break...daily chart shows a pop, pull, retest of 52wk high, fail, but support held and now its trying again. 125 now, test is high 137...who cares if it fails again, might be a $10 run up in the next few days.
Follow the rules: Cut losses quickly; Don't overtrade; Take profits/sell into strength; Don't chase, watch for the pullback; Have a plan and stick to it
View my other posts/give me some advice at http://part-timepennystocktrader.blogspot.com/. Follow me on twitter @BNGESG.
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