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[Weekend Summary]

Dear Member,

Definitely a pretty decent week. Current gains in my recently acquired LEAPS calls on Heinz (HNZ) (Jan '06 35 calls) and Knight Trading (NITE)('06 12.50 calls) more than offset the loss I took today on my Advanced Micro Devices (AMD) (April 15 Puts).

I am still in the HNZ and NITE LEAPS and was able to move stops up on both today. If nothing too wierd happens over the weekend, I should be able to move those stops up again on Monday or Tuesday.

Armor Holdings (AH) moved up more than $2.00 this week which served to strengthen my Dec 40 naked put position. The stock closed the week at $42.32. I won't have to do anything to keep the $2.30 a share I am up on the play as long as the stock stays above 40 to Dec expiration.

Today I bought the '06 20 LEAPS calls (WEDAD) on Electronic Data Systems (EDS) on a break up through a resistance. The stock has been in an uptrend since August and just climbed another hurdle.

I also opened a bullish put spread on Motorola (MOT) by selling the December 17 puts and buying the Dec 16 Puts. This play could provide a 25% return on risk before commissions if the stock stays in its current trend and remains above 17.

I still hold the last leg of my Feb 60 straddle on Harley Davidson (HDI) and am long the Feb 60 calls. HDI is treading a little water right now, but I am looking for it to follow the bullishness in the market.

The indices are looking strong. Each closed today near its' high. The Nasdaq and DOW industrials each broke through and closed above resistance. The SP-500 closed at its' high today right at a resistance level. Some retracement in each of these wouldn't be a surprise, but overall, the market looks more bullish now than it has in some time.

I'll be teaching a two day technical trading class for fairly new traders this weekend. The classes are really fun for me and the students help keep me sharp.

You have probably noticed that I buy LEAPS fairly often. I like this strategy because it lets me control the stock for much less money than would be necessary to buy the stock. Time value doesn't run off very quickly with LEAPS and I can write covered calls against the LEAPS. When I buy LEAPS instead of the stock, I do give up the right to receive the dividend and I don't get to vote in the shareholders' elections. Generally, though not always, I buy LEAPS on stocks that pay no dividend so I don't give that benefit up anyway. When I write covered calls against my LEAPS, I am prone to write out of the money calls since I do not want to be assigned.

Have a wonderful weekend and good trading!

Sincerely,
Bill


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