Regardless of day-to-day volatility, the QQQQs are still in a strong uptrend and don’t show signs of slowing down. In fact, I’ve heard several times of the past month that technology is where it’s at — and the QQQQs are have alot of great tech stocks.
Just bought a QQQQ DEC 07 50 call @ 4.92. Main criteria I used was a delta of .75 or higher seeing that the QQQQs had take a small little dip but overall seem to going up. I’ve paper traded this strategy before and it worked out really well.
On another note, just heard out that Price Headley is a guest speaker on today’s Think or Swim chat. The session is titled, “Identifying Technical Turning Points and Key Sector Trends”.
I just closed a bear put spread on Pulte Homes that I opened in Sept. My thinking at the time was that the stock was in a freefall and the housing market was not going to make a spectacular comeback in a month. So, I placed a bearish trade that would be profitable if PHM moved anywhere below 15 and reach it’s maximum profit at 12. I was sure it would hit 12. I was wrong. But, it did go down and that’s all I needed. For a while there I was sure this was a losing trade and a hard lesson learned. It may not have gone to 12 but it went low enough and since I had held on until expiration day I had the time value to make up most of the profit.
9/10, Bought Bear Put Spread
BUY 4 PHM OCT 07 15P
SELL 4 PHM OCT 07 12.5P
Debit 0.80
Cost of trade: $320
10/10, Sold Bear Put Spread
SELL 4 PHM OCT 07 15P
BUY 4 PHM OCT 07 12.5P
Credit 1.15Credit to account: $460
Profit: $140, 43.75%
Wow! Here’s a trade that I’ve been regretting for weeks now because I was sure I’d lose my whole investment — any my trading account isn’t that big!
Instead, I got 43.75% return. That’s not bad.
So, what did I learn: