A Baseball player need only get a hit once every 3 at bats to be called a great hitter. If a basketball player hits 50% of his shots hes doing better than almost all of his peers. A weatherman need never be right he can just blame his forecast on the weather. How about an out of the money options trader?
I wasn't having the best of weeks heading into the trading day yesterday. I sat on my hands as we gapped lower and continued to sink. I saw a few opportunities and started to get into some positions. I bought LVS $40 calls for $.29, I ended up exited at $.19 for a loss, I then bought the GDX $41.50 calls at $.12. I alerted these trades in the chat room in real time. The GDX calls I was able to get at the low of the day. GDX rallied from that point on and I sold half at $.70. I was able to sell the rest today at $.80. That's $.12 into $.75.
After buying those GDX calls I looked for more opportunities. With GDX recovering its losses I saw that FCX was lagging. I opened up $32 FCX calls for $.29. Once again I alerted this in the chat room in real time. I was able to sell half those FCX calls yesterday and the rest today for a tidy profit. They hit $1.32 from my entry of $.29.
With the big China data coming last night I entered into some BIDU $110 calls for $.40. I ended up selling for a loss today as BIDU couldn't must much of a rally.
Later on in the day I wanted to take a trade on JPM without actually buying JPM options. I entered into the $95 GS calls at $.38, and again posted this trade in real time in the chat room within seconds of making the trade. Those calls traded mostly flat the rest of the day yesterday, but today they soared hitting almost $3.00!
To recap I opened and posted 5 trades in the chat room yesterday and three of them surged several 100%.
GS $95 calls at $.38 hit $2.80 that's potentially $380 into $2,800 = +$2,420
BIDU $110 calls $.40 to $.28 that's potentially $400 into $280 = -$120
LVS $40 calls $.29 to $.19 that's potentially $290 into $190= $-100
FCX $32 calls at $.29 hit $1.32 that's potentially $290 into $1,320= +$1,030
GDX $41.50 calls at $.12 hit $.93 that's potentially $120 into $930= +$810
Potential profit: $4,400
An options trader can be wrong and yet be more profitable than any other trader, while also putting less capital at risk.
