Monday, December 11, 2006

Breaking News: Short Sellers Sniped!


As posted from this morning, I had my Call Stock Options already in place from last week. Call Options are an agreement that gives an investor the right (but not the obligation) to buy a stock at a specified price (strike price) within a specific time period (expiration date). It may help you to remember that a call option gives you the right to "call in" (buy) an asset. You profit on a call option when the underlying asset, or stock, increases in price. All my Calls behaved very nicely today, in order to help snipe some short sellers, running up a total Net Profit of: $2,570.00


Thank You, Simply Options Trader, from Simply Options Trading for mentioning that Best Buy is reporting earnings tommorow.

On a side note, as far as being long on these Call Options, I saw a very very interesting chart today. It is one of my regular stocks to watch on my watchlist and it behaved in a very abnormal way today. As we all know the market was lead higher this morning by Merger and Aquistion News (M & A), but for some reason this stock traded in the entire opposite way, and commenced what I call a "blood bath sell off".

NutriSystem Inc. (Public, NASDAQ:NTRI)




After testing yesterday's low, and printing a Bearish Engulfing Candle, a chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one, I decided to short this stock with good risk management, and a tight stop in place.

Bearish Engulfing Candle:


6 comments:

Flatwallet said...

Cal,

Where did you learn to trade and how long did it take you to get here?

Thanks,
LP

Jim said...

Nice option trades! Keep it up!

Btw, per your post on my blog the other day, I linked to your blog.

Best of luck with your trading on Tuesday.

Jim

Anonymous said...

Great trade on NTRI! It took me 7 days to trade it from $68 to $75+. You managed that in 1 day, nice! I luckily sold my calls last Friday near the high as momentum began to deteriorate. NTRI was making new highs on low volume which is always suspect. -TVH

Cal said...

I've been trading stocks for 1 year as of this month. Hard work, and passion got me here, oh yea, and let's not forget that hunger for green paper.
-Cal

john w said...

N1 on NTRI. Looks to me as if some fund dumped it. Went from a million shares a day to 4 million - about half of that in the first hour and a half. This happens at this time of year - it had a good run up and the funds start protecting profits by selling stocks they think are done. Once a big block for sale hits the wire then everyone else joins in the fun. A shortists wet dream.

Given that Walmart has been missing their number lately don't be surprised if BBY misses its number today (35 cents). Or if hits it and then provides weak forward guidance it might be bad for investors.

I'm probably wrong it probably hits it plus a penny and guides higher into the new year.

onebadtrade said...

Cal,

I realize that finding good trading candidates is the way to go. How much time to you put in each day to do research? Do you use any screeners to find your stocks? That was a nice trade.