Wednesday, September 19, 2007

Nice Plays and New Ideas!

From my last post I shorted TIE & OGE at their 50SMA's. I covered for a couple hundred dollar profits on both stocks, no substantial movements downward, but a pullback nonetheless.

Since, BIDU has broken out on strong volume and taken off for the skies! As of right now the stock is looking ripe for a pullback, and that's exactly where I'll be buying Call Options when this occurs. The previous resistance of $220 will certainly hold as support if the stock will even dare trade that low. Here is the chart I last posted, compared to where it is now, and my recommendation was to watch for a high volume breakout or a bounce against resistance downward, although the former was achieved.

Also my favorite pick that I've been stalking for a SHORT is NutriSystems (NTRI). The stock just couldn't muster up enough buying power to push past it's 50SMA and try to fill an earnings GAP Down from a few months before, perfect to short with relatively low risk, with a great reward profile. Take a Look!

I was a buyer of the OCT $55 Put Options as well as the $45 strike for a more aggressive play. Today the stock was down huge, to the tune of 12%, with the options spiking up 150% and 95% respectively. My Virtual Trade transactions consisted of:

September 13, 2007:
Buy 50 NTRI OCTOBER $55 Puts for $2.65 per contract (.NSIVK)
Buy 50 NTRI OCTOBER $45 Puts for $0.85 per contract (.NSIVI)

Sell 25 NTRI OCT $55 Puts for $4.70 - Profit $5,125
Sell 10 NTRI OCT $55 Puts for $5.80 - Profit $3,150
Total Realized Profit: $8,275.00
P.S. Holding remainder 15 contracts currently priced at $6.15 (unrealized - $5,175.00)

Sell 25 NTRI OCT $45 Puts for $1.50 - Profit $1,625
Sell 10 NTRI OCT $45 Puts for $1.70 - Profit $850
Sell 10 NTRI OCT $45 Puts for $1.50 - Profit $650
Total Realized Profit: $3,125.00
P.S. Holding remainder 5 contracts currently priced at $1.55
(unrealized - $350.00)

I've been trading virtually a lot lately to test strategies and gain confidence in the ideas that I'm solidifying with my research. I use Virtual Stock Exchange, Virtual Stock Exchange to buy and short stocks in individual portfolios and also CBOE Virtual Trading Tool.The CBOE has a brand new trading tool which is ABSOLUTELY AMAZING! It's powered by ThinkorSwim and also, Tim Knight's former website in which he developed and then sold.


Reno said...

I've been tracking NTRI as well and thought the large drop down was very interesting. Although I think it's an interesting stock I couldn't put my money long or short in it since it's way too volatile for my risk level.

Shane said...

I think it is a great long term buy. Buy the stock and sell the vol and you'll do well

Alex said...

Wheres the pic of the bull taken? Like it!

Anonymous said...


stock option trading said...

The right kind of stock option trading with NTRI would also be a nice trading advice. Unfortunately, most traders don't even know that selling options is, based on winning probabilties, the better option strategy to apply.

Anonymous said...

hi cal-

thanks for the great blog! just curious where you got the brown-colored graph from? it looks awesome!