Help

Options for Beginners > Forum Posts

About Us

This group is for brand new option traders. If you've never traded an option, this groups for you. Although... we would like to have some experienced option traders to help us through the more difficult trades. I will start this group with a simple covered call. This will be my first option trade, so the excitement starts right away. We will be using The Options Playbook as our guide. Everybody can ask all and any questions without the fear of looking like an idiot.

Active Since 10/21/08

Adminstrators

User Avatar
biggainer

Moderators

Keywords
Options for Beginners Forum > Trading ETF's in these markets

Start A New Topic | View All Group Topics

User Avatar
User Avatar Brokerage Account

PutAngel

Member since: Oct 08
Trades 0
Trade Notes 0
Blog Posts 0
PutAngel Brokerage Account
Posted December 04, 2008 (01:56PM)

With all these wild swings we're seeing both ways, smetimes I believe it's better to stay in cash, the most liquid of assets. However, as an active trader, I do see that I've been making money even in these uncertain  markets. Here are a few tips to consider as well as a few ETF's I like. The only reason I'm choosing ETF's is that choosing a direction on a stock these days is suicide. ETF's are starting to become more popular because of the different styles available (Short, Ultra's, Ultra Shorts, etc.)

So anyways, here are a few to chose for quick bucks:

Puts/Bear Call Spread on PowerShares QQQQ. Honestly, everday it seems another chip maker is giving a "weak demand forecast". I would buy a bear call spread on it with an ITM call and then selling maybe a Jan. 32-33. The resistance for QQQQ lately seems to be right below the $29 level and it's likely to continue trading in this range through the beginning of Jan. I would buy these on a 2-day rally. If you don't like puts, then play QID, the Ultra Short of QQQQ, meaning it moves double the inverse.

SPY: I still want to be long SPY if the S&P moves to 800-820. I think both the 816 and the 800 levels are key supports and I would buy and hold going into next year. If you don't want to buy sares, buy long calls out in Feb or March. I still believe in a strong Obama rally early next year.

Call Spread for UYG: Sure the XLF is nice, but the double is nicer to me. Of course, it's double on both sides, so watch out. A Call Spread on the UYG (March 5-16 Spread) would be great. Buy the 5 sell the 16. I think much of this recession is getting priced in fast and we're going to see the mother of all bear market rallies.

Last up is DUG: It was up about 13% and it's a great short-term play as momentum is pulling oil down to the hole. Watch out though, the commodity bulls will be back for sure. 

Anyone else playing the ETF's?


Stay long and strong my friends.  
User Avatar
User Avatar Brokerage Account

PutAngel

Member since: Oct 08
Trades 0
Trade Notes 0
Blog Posts 0
PutAngel Brokerage Account
Posted December 17, 2008 (12:42PM)
Wow, big rally. I covered some shorts and I'm still very bearish going into this new year. The VIX printed above 50 but closed below today, however, let's not be idiots folks, the VIX has been here before...look at the chart. The key here is to believe that we are in a range. If you don't believe the bear market is over and if you don't believe we're going down to 400 on the S&P, check out the chart of the VIX, or the implied volatility for SPX options: 
http://data.cnbc.com/quotes/VIX/tab/2


The VIX has been here before and it spiked up again. We're seeing longer trends moving into this recent upturn, but if it's true that we're in a range, watch out SOON, because we look to be trading on the highs of the range for th S&P and the Nasdaq. The S&P rejected 920 multiple times and the 900 level is minor support. once we break this time, I think we'll break hard going into the end of the year and Jan and then take it to the rooftops into march and april. watch for a 800 S&P in Jan and then a reversal to blast to 1200 in the summer. The summer rally is much more promising then this Dec one.