DAN, I like this one. I am long C the stock, so I know it well. Even though this is only my 3rd option trade I would feel comfortable buying now and adding if It went lower. Thanks.
Hi Dan,
I found it interesting that you selected Citi Bank. I already have a position in Citi. I went a little further out; I’m long the 5Jun Call. Thanks again.
Bought Apr 3.5 calls back on the 14th…I am planning on holding this for a couple months…C poked its head above 5 bucks on Jan 6th for the first time since April 2010. Then it closed above 5 on the 12th. I see this as very bullish…the pullback middle of last week with subsequent bounce does show me that there is hightened interest in this stock…I have set my stop relative to the Thursday low in the stock….I plan to buy more of the same in another account.
Glad to see that you picked 2 of my stocks. I have 3jan12 @1.58.10 and 3.50jan12 @ 1.63.95. Also 4Jan13 @ 1.58.60. None of these are ideal, but I wanted to have more time to fix my screw-ups since I’m a newbie at options.
I am signed up for AutoTrade with TradeMonster but no order has been entered yet (9:45 PM Sun 1/23). When does the order get entered? Is AutoTrade in effect now? Will both the C and DIS trades be submitted?
It is my understanding that since trading was not in effect on Sunday, the trade would first show up Monday when trading opened. Till then, I believe, that the trade is a pending trade and not an active trade.
The March options weren’t available till the January options closed which I think occurred Saturday. If your trading platform does not update the option chains till late Sunday night, the March options would not show up. All option chains show the first 2 months of options and the rest of the option chain which might or might not include the 3rd month depending on which schedule the option is on. Also, since the March options just opened today, they won’t have any or very much volume and Dan seems to use the volume of options as part of his determination on which option to buy.
I understood that stop loss limits were supposed to be provided for this and the DIS trade at a later day. Is there any guidance for option rookies like me what to do in this currently very rough market? I have not seen comments or advice for a few days on these latest trade ideas.
Please get out of your trades in DIS. Always can buy back when market recovers. Options can make one lose more than one can stomach, especially if the stocks gap down at the opening bell !
I am very new at options and have a couple of questions. I purchased some Citi calls at (Buy to Open 30 C Apr 16 2011 4.5 Call Market 0.43 ) which i hope i got right. The way i thought i understood it is to not pay more than .58. Per Dan’s email it says to put a stop at .25. In TD Ameritrade when i go to put a limit it is asking to select sell to close or sell to open. Which one do i pick? And for the limit do i put a limit or a stop limit or stop mkt?
Sell to close, stop loss, simplest is market order but stop loss w/limit sets your boundary. Make sure you do not put this in as just a limit order or it will fill right away to your detriment. Here are the pros and cons of stop loss market and stop loss limits. Stop loss limit market may fill at or below the stop you set based on liquidity. Your broker wants to fill it and earn their commission but the fill is not always right at your stop setting. If the option is fairly liquid ie several hundred contracts trade per day with thousands in open interest a market order should fill pretty quick. The opposite is true with low liquidity. Now stop loss limits. When you set up the stop loss limit you have to set the the stop loss trigger and the limit. The limit basically establishes the lower limit of the range you are willing to accept. If the underlying stock gaps down it could totally by pass the stop loss and the option could be trading below your stops but never execute leaving you with hefty losses. In addition the price could drop through the limit price range too fast to execute again based on liquidity and speed of the price change (stop loss limit.) I have made all these mistakes. Hopefully you do not make the same. For Citi the liquidity should be there so I would go with the Stop Loss Market order. If we get tight with stops later to protect profits you may want to switch to stop loss limit. Does this make sense. I also strongly encourage you to watch Dan’s trading videos on opening and closing. Without knowing which you are to do you should only be paper trading until you learn the basics.
Excellent Dan.. I am already long a few $4.50C Calls..Thanks for the trade I will add this to the arsenal!!
Great pick Dan, I have been watching this stock and got in last Friday after I saw the stock on the rise up.
DAN, I like this one. I am long C the stock, so I know it well. Even though this is only my 3rd option trade I would feel comfortable buying now and adding if It went lower. Thanks.
I bought the $4.50 calls for March on Friday for .48
How long are we holding? What happens if we don’t reach the target by April?
Hi Dan,
I found it interesting that you selected Citi Bank. I already have a position in Citi. I went a little further out; I’m long the 5Jun Call. Thanks again.
Bought Apr 3.5 calls back on the 14th…I am planning on holding this for a couple months…C poked its head above 5 bucks on Jan 6th for the first time since April 2010. Then it closed above 5 on the 12th. I see this as very bullish…the pullback middle of last week with subsequent bounce does show me that there is hightened interest in this stock…I have set my stop relative to the Thursday low in the stock….I plan to buy more of the same in another account.
Glad to see that you picked 2 of my stocks. I have 3jan12 @1.58.10 and 3.50jan12 @ 1.63.95. Also 4Jan13 @ 1.58.60. None of these are ideal, but I wanted to have more time to fix my screw-ups since I’m a newbie at options.
I am signed up for AutoTrade with TradeMonster but no order has been entered yet (9:45 PM Sun 1/23). When does the order get entered? Is AutoTrade in effect now? Will both the C and DIS trades be submitted?
It is my understanding that since trading was not in effect on Sunday, the trade would first show up Monday when trading opened. Till then, I believe, that the trade is a pending trade and not an active trade.
This is exactly what occured. It was filled Monday at the open.
Newbie question: Why April?
March too close? June & Sept are available.
Does it have to do with next earning announcement is mid April?
Are there other reasons?
The March options weren’t available till the January options closed which I think occurred Saturday. If your trading platform does not update the option chains till late Sunday night, the March options would not show up. All option chains show the first 2 months of options and the rest of the option chain which might or might not include the 3rd month depending on which schedule the option is on. Also, since the March options just opened today, they won’t have any or very much volume and Dan seems to use the volume of options as part of his determination on which option to buy.
Purchased 100 contracts at $0.54/contract this morning. Adding this to my current holding on C (purchased at $4.84). Go C
Purchase Apr 4.50 C @ .56 first time buying options.
Would the stop Dan sets later show up on the Autotrade, also?
I’m in at $.57. Come on CIti!
This pick is great. I’m always respect your probability pick
First option trade with OMM and excited about that! Bot April 4.50 C calls at .57. Thanks, Dan!
Hi Dan. Why did you choose the $4.50 call? Why not the $4.00 or even $3.50? What was the factor or factors that led you to that specific option?
First trade w/OMM. Now down 12%…what to do? Buy more, sell or sit?
I understood that stop loss limits were supposed to be provided for this and the DIS trade at a later day. Is there any guidance for option rookies like me what to do in this currently very rough market? I have not seen comments or advice for a few days on these latest trade ideas.
Please get out of your trades in DIS. Always can buy back when market recovers. Options can make one lose more than one can stomach, especially if the stocks gap down at the opening bell !
The stops are posted in the forum by ghan74 on 31 Jan. url below.
http://www.optionmarketmentor.com/members/forumui/
I am very new at options and have a couple of questions. I purchased some Citi calls at (Buy to Open 30 C Apr 16 2011 4.5 Call Market 0.43 ) which i hope i got right. The way i thought i understood it is to not pay more than .58. Per Dan’s email it says to put a stop at .25. In TD Ameritrade when i go to put a limit it is asking to select sell to close or sell to open. Which one do i pick? And for the limit do i put a limit or a stop limit or stop mkt?
Sell to close, stop loss, simplest is market order but stop loss w/limit sets your boundary. Make sure you do not put this in as just a limit order or it will fill right away to your detriment. Here are the pros and cons of stop loss market and stop loss limits. Stop loss limit market may fill at or below the stop you set based on liquidity. Your broker wants to fill it and earn their commission but the fill is not always right at your stop setting. If the option is fairly liquid ie several hundred contracts trade per day with thousands in open interest a market order should fill pretty quick. The opposite is true with low liquidity. Now stop loss limits. When you set up the stop loss limit you have to set the the stop loss trigger and the limit. The limit basically establishes the lower limit of the range you are willing to accept. If the underlying stock gaps down it could totally by pass the stop loss and the option could be trading below your stops but never execute leaving you with hefty losses. In addition the price could drop through the limit price range too fast to execute again based on liquidity and speed of the price change (stop loss limit.) I have made all these mistakes. Hopefully you do not make the same. For Citi the liquidity should be there so I would go with the Stop Loss Market order. If we get tight with stops later to protect profits you may want to switch to stop loss limit. Does this make sense. I also strongly encourage you to watch Dan’s trading videos on opening and closing. Without knowing which you are to do you should only be paper trading until you learn the basics.
good job explaining! thanks!
Slow bleed on this one, been moving sideways since I bought it at .55, still time on this one, but I hope it bounces up soon!