by Das Brain
The U.S stock market over the last 3 months have been on a tear, since the first China stock market scare, the stock market just keeps going up, only slowing slightly for a small break downwards here and there, then proceeding upwards. The upward momentum is so strong that the second China / Shanghai stock market correction of almost 7% didn’t even derail its strong momentum upwards.
by Das Brain
The timing of when to purchase a stock is one of the hardest thing to do. Market timing as it is called, is a skill that generally takes many years to learn and become proficient at. In regards to long term and intermediate trades (holding stocks or options from months to years out), I am quite proficient at this. Most of the time I am correct in determining which direction the stock price will go. However, as for short-term trading (day trading, swing trading), I still have quite a bit to learn and improve in this area.
Here are some more glossary terms since Section A was posted a while back.
Open Position or Opening Transaction
An addition to, or creation of, a trading position. An opening purchase transaction adds long options (calls) to an investor’s total position, and an opening sale transaction adds short options (puts). An opening option transaction increases that option’s open interest.
by Das Brain
Since my last post on MoneyAcccumulator.com, I have been deep into trading stocks and options and doing pretty well. This day or swing trading process requires so much concentration throughout the entire 9am to 4pm trading day that I haven’t had much time to blog. So, if you thought I fell off the face of the earth…nope that didn’t happen.
by Das Brain
Intro To Option Trading – Part 6b
What else can I do with option contracts?
Selling Covered calls
First of all let’s define what “covered calls” mean. Covered call means that you are selling call option contracts on shares that you already own, and taking in the income from that sell transaction. Therefore, selling covered calls is an income strategy with limited downside protection. However, most people think that selling covered calls is an income strategy with no downside or possible losses, but that is not true, one should understand that there is a potential to lose with this strategy as well.
by Das Brain
Right before I went on my short vacation to Miami, Florida I bought and sold some Corning NYSE:GLW call option contracts. This was done in the span of a week and was mainly done as an experiment to see if it was possible for me to take advantage of weekly or bi-weekly swings in share price of a stock. I have in the past made big profit from options trading selling after 5-6 months, but within a week or two is something else.
by Das Brain
Intro To Option Trading – Part 6a
What else can I do with option contracts?
PUTS as insurance on your current stock holdings (protective put strategy)
by Das BrainĂ‚Â
Last week I tested and built / refurbished two computers from scratch using Pentium Chips, motherboard, computer cases and RAM from 3 old computers from the east end Toronto City Recycle / Trash station. That was why I didn’t have much time to blog, it was quite a bit of work but the end result was that I saved quite a bit of money and it kept me busy.
It looks like I got to get back on track and finish the “Intro To Option Trading” series of articles.
Let’s continue with part 5
by Das Brain
How do I trade PUT option contracts?
Glad I wasn’t playing the stock market today, it took a huge hit. Luckily I cleared out of most of my positions a week or so ago and sitting on mostly cash, except for a few PUT option contracts. But that is O.K because they are PUTs expiry in August 2007, I am hedging that the market will go downwards from here on in until July. Have to see what happens the rest of this week in the stock market.
by Das Brain
I just finish reading the book “The Electronic Day Trader” for the second time. I bought this book back in year 2001 when the whole day trading thing during the dot com boom was hot and read over it once back then but it didn’t really stick. What I mean by that was what I read kinda just went through my eyes and out my head, I’m sure everybody has read a book before but forgot much of it shortly after. I guess at the time I did not treat it seriously, I didn’t take notes.
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