At the opening the market dropped to 9558, right at our first theoretical Dow low, and all puts could have been sold profitably, to up to 40% depending upon issue and time of buy.
Call buyers were also rewarded on the Oct500C buying on the downturn, and selling to .60 profits within an hour. The position was later available for tight day trades as the market hesitated.
This is a good example for traders of always having a sell order in. We went right to our 9550 downturn at opening, and all puts and calls hit their profits. By 3 p.m., the two way trades we emphasized had shifted focus again, and the market began moving down. Astute traders had bought the puts again on the upturn, and sold again on the downturn after 3 p.m.
Today I'll share an example of how I personally trade, as last Thursday and Friday were excellent examples of how one could "day trade" regular stock options that one owns, and index options.
If you'll remember Friday we moved from a 9776 theoretical Dow top to a 9600 low. First, I sold an open put I had from Thursday, that I had already sold 2/3 of profitably, selling the final 1/3 of my ITM issue at 30% profits.
As the market hit bottoms and I sold this issue I bought the October 500 Call at 3.00 and sold later in the day for 3.90. So ...I had two profitable trades and was out of the indices for the week, which was my goal.
At www.bluechipoptions.com we also own a stock option on McDonalds. This was a signal given months ago, MCDAK McDonalds January 2010 55.00 call. Traders have made two buys on this call, and currently own it at 3.10 average price. This is a long term call LEAP option that we've been holding. However, I saw the issue drop dramatically at opening the day prior and hit lows of 2.70. So, in a separate trade from my current holding I bought 20 MCDAK at 2.70 last Thursday. Sure enough, the market rebounded Friday and I was able to sell my 20 MCDAK at 3.60, pocketing $1800.00 in a day trade on an issue I own.
I was trading all day Friday, and this was key, as I day traded because of the volatility of the market. However, for those of you saying "but I could not be online," I'll share that I did ALL of this trading sitting by the pool on an iPhone, checking periodically.
The important point is not "that I won," and I am giving you a testimonial. The importance is that I was "on a run" and I played all I could. Near the end of the day I had "the itch" to buy a put for Monday's opening, and even though it became our signal for Monday morning, I did not let myself buy the issue as the close of the market day, because I was trying to control my "greed." I could sense it building, so I simply stopped myself.
Now, let me yell at you. Many of our traders make a living off OEXOptions.com, many are stockbrokers and professionals, and as many are individual investors, with people from all over the world. In fact, over 28% of our client base subscribers from India. Over 15% from Australia.
My point is: GET to work. Many of you do not utilize our manual, or the many videos on the website. I can tell by the stats on our work and website, and I'm constantly surprised by how few of our paying subscribers really utilize the videos on our websites, or study our calculation worksheets, or even write me. It's part of my thinking that I've been outlining "we are fucked," and is said to all of us. If you intend to do well trading options, become an expert.
Study. Journal. Read the manual. Watch the videos. ASK ME QUESTIONS!
There is an old rule of 80/20. Be in the 20. Work to learn to trade. It will not just "come to you."
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