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Thread: Covered calls, naked puts and more...

  1. #1
    Join Date
    Feb 2008
    Posts
    538

    Default Covered calls, naked puts and more...

    Here's a great place to talk about your favorite options strategies, as well as the plays to avoid. Personally I'm not an options trader, but I know lots of you who are - so let's hear it!

    What do you like best about your options trading, and, what are your favorite setups and plays, and why?

    thanks,

    Ken

  2. #2
    Join Date
    Mar 2008
    Posts
    6

    Default Married puts

    I have been using married puts lately very successfully in this volatile market. This is where you buy stock and buy a put option on the stock to reduce downside risk. If I reach my target ( market/stock rises ), I sell both positions. If put option doubles in price ( market/stock drops ), I sell my put option and buy another. Stock screening includes > $30, > 1,000,000 shares/day avg., ADX > 25 and rising, %WilliamsR ( 30 ) > -20 on daily charts. If %R goes below -50, I sell the stock.

  3. #3
    Join Date
    Aug 2008
    Posts
    1

    Default Options & Moving Averages

    I have been trading options on breakouts above 50, 200 day mov. day avg. If the break out with high volume I buy a call with a tight stp. (about $1.00) under mov. avg. With a tgt. price of how much the stock as moved in the last 6 months before short term correction. Also use western technicals to look for break out target price. I'll do just the opposite if it hits mov. day avg. and fails to break out above. I will say that I do buy and sell on avg. 50 options per month though. Very quick gains or loss here. Ken could you quickly explain what the ADX and % Williams track. I have been using MACD and STOCHASTIC and they seem to really lag on early entry point, move is already started which cuts down on winning trades, more stop outs. Sorry for length-newbie

  4. #4
    Join Date
    Feb 2008
    Posts
    538

    Default

    Personally I don't use %Williams; for the ADX see the articles on esignal (links on main daytradinguniversity.com homepage at bottom). I only use MACD/stochs with currency pairs, they seem to produce too many false positives/stops for intraday/swing stock trading lately.

    -Ken

  5. #5
    Join Date
    Sep 2008
    Posts
    1

    Default

    I think options are a must. Options work like insurance or leverage. With options you get to pick the risk/reward from very safe to very explosive.

    I go bearish as the VIX slopes down, go bullish when it slopes up. Also, I watch RSI, StockRSI, MACD, Stochastics, 20-, 50-, 100- and 200- MAs, minute, 5 min, hourly, daily. For a day trade, if it is going bearish, follow until price goes up crossing the 20-min MA, or until price crosses the 50-min MA. In particular, I find opening gaps to be the most challenging and most profitable.

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