rrochon
117 posts
msg #26963
- Ignore rrochon |
6/20/2003 5:28:12 PM
Anyone else lose money on RNWK?
Now I'm holding UBET, GW, and APT. Anyone else buy these?
Dick
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rrochon
117 posts
msg #26964
- Ignore rrochon |
6/20/2003 5:47:27 PM
In the Bollinger Bands 2 board I posted a question about buying call options instead of shares, and I found out why it is not a good idea.
The spread between Bid and Ask is too large. I bought slightly in the money calls,next month out, where I could get a Delta of over 90. This means that if the stock goes up $1, my option would go up 90 cents, which is pretty good since I would only pay maybe $2 to control 100 shares of a $10 stock. ($200 instead of $1000)
Problem is that the spread might have been 15% on the options, so if I paid $2 a share it would have to go up 15% before I could sell at the same price I bought. At a Delta of 90 the stock would have had to go up about 17% for my options to break even.
We're playing these stocks from low BB to high BB, and usually there isn't 15% between them. So even if the stock did move clear to the upper BB, if it was 15%, I lost money on the option, where I would have made 10% to 15% buying the stock.
Lesson: DON'T PLAY OPTIONS ON THESE STOCKS!
Education is expensive, isn't it?
Dick
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rmoseley
6 posts
msg #26966
- Ignore rmoseley |
6/20/2003 7:26:08 PM
Dick,
I have been playing options with some success, but I buy way out of the money with several months on the contract, here’s my reasoning. Of the three things that make up the price of the option; time, strike price, and volatility the time is the key. Here’s what I have noticed. I typically buy a option for about a dollar or so for a strike price at or even a little above the top bb when, and if the stock starts to move up the premium is greatly affected and if the stock moves down -not so much. What I do is when the premium doubles I sell half, leaving have to ride for free, and I chase the other half up with stops, or just sell the other half if the stock moves lower. I have had success with two stocks here lately, im still holding 5 LHHF and looking for a play for Monday. Let me know what you think I copied the entries out of my trading history.
LH
06/09/03 Buy Open 10 LHHF LH AUG 30 Call
Day/ Market
1.20 Mkt
06/20/03 Sell Close 5 LHHF LH AUG 30 Call
Day/ Market
2.20 Mkt
and ABGX
06/04/03 Buy Open 5 AZGJB AZG OCT 10 Call
Day/ Market
1.45 Mkt
06/06/03 Sell Close 3 AZGJB AZG OCT 10 Call
Day/ Market
4.40 Mkt
06/06/03 Sell Close 2 AZGJB AZG OCT 10 Call
Day/ Market
4.10 Mkt
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ray_reeves
5 posts
msg #26985
- Ignore ray_reeves |
6/22/2003 12:32:19 PM
Muddy,
Do you pay any attention to % institutional ownership? I noticed that GTI on Friday's scan has institutional ownership of 95%. That seems really high. Also, what about stocks that have very high, say 85%, insider ownership? Perhaps these things just do not matter over the few days that we are typically in a stock?
Thanks for sharing your experience.
Ray
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wallman
299 posts
msg #26990
- Ignore wallman |
6/22/2003 2:43:33 PM
HI RAY,you're welcome.very good ?'s,a 95% institutional ownership would concern me very much in the longer term outlook of a stock,as would heavy insider ownership but from what i have observed over the last 20 months,WITH OUR MATCHES,can't say for it goes for all stocks, it doesn't seem to effect our shorter holding period,i've been wrong before and will no doubt be wrong again on some of this stuff so please if you feel otherwise and/or testing backs you up,it would be wise to avoid such stocks, thanks again,MUDDY
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rrochon
117 posts
msg #27025
- Ignore rrochon |
6/23/2003 5:59:20 PM
rmoseley,
Your system makes sense. I was buying in the money options next month out. when the stock touched lower BB. The stock might move 15%, but I would still lose money, because there was more than 15% spread between the Bid and Ask.
What filter did you use to get your candidates, and how did you rank the stocks to select the one to play?
Dick
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deprez
60 posts
msg #27494
- Ignore deprez |
7/21/2003 10:47:39 AM
Hi,
I have studied your method. I am trying it out today.
I bought GNBT at 1.53 and CRIS at 3.48.
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ig0r
51 posts
msg #27495
- Ignore ig0r |
7/21/2003 11:03:14 AM
groups.yahoo.com/groups/StockFetcher
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mslattery@dc.rr.com
91 posts
msg #32014
- Ignore mslattery@dc.rr.com |
5/9/2004 8:49:02 PM
If after touching the lower bollinger band, short-term On Balance Volume(OBV) and Money flow indicator(MFI) readings are "VERY POSITIVE" you have a buy signal. (From 1994 Stocks and Commodities article on John Bollinger)
Any sugestions for reasonable exit straategy? I was going to try two consecutive days with a total of 10% down action to make me jump ship. In this market that's a sell for almost everything. Michael
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sparksgl
4 posts
msg #32019
- Ignore sparksgl |
5/10/2004 6:38:46 PM
Well my screen came up with UMC-CHTR and ADCT..
Going to start tracking everyday.. will let you all know the results... GOOD Luck...
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