AAPL
RIMM
DRYS
MOS
POT
Thursday, May 28, 2009
DRYS Contingent Order Idea
When it's on a run, buy DRYS common plus a flock of calls. Stock: opened 7.10, down to 6.78, then up steadily past 7.36. OOC FU 7.50 June call: opened at 0.6, down to 0.4, climbed to 0.7. Buying at 0.4, profit on $10,000 would be $5000.
Set stop on the common at about 2%, contingent order to get out of the options if the stock sells. Options were more volatile but continued up; will track closer to stock as we near expiration.
And, WATCH FOR CORRECTIONS in DRYS! The May 28 chart shows what it's capable of doing. It finished at 7.30, with the OOC FU call at 0.60.
Confidence...
Still have confidence that I can succeed at this but it takes attention during the morning session.
Frustration....
Mkt started out mixed and then trended down sharply till 10:15, then everything shot up but I wasn't tuned in. Have to find a way to stay more in touch with the early morning action.
Also don't forget to watch options on fave stocks. DRYS went from 6.8 to 7.18 but OOC FU (June 7.50 call) went from .40 to .60.
Long-Term Low-Stress Plan
Ideas for long-term investment planning:
- Break account into thirds (assuming 3-day settlement on non-Day-Trading accounts like IRA)
- Select 3 or 4 stocks that reliably trend back toward the mean and are attractive candidates based on fundamentals (IBM, RIMM, AAPL, MOS, etc.)
- Take large long position with 1% stop and 5% profit target in each.
- Track performance for a month and evaluate/adjust.
Can I keep a spreadsheet here in the blog???
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