Lee ran a great webinar this morning about Spread Strategies. He also covered some of the Greeks and explained how they affect the price of an option. For those who who trade vanilla puts and options I suggest you listen in on some alternatives. Spreads offer you more variety, the ability to finance the purchase of an option by selling a farther out of the money option. Lee covers Spread Strategies in a very easy to understand webinar.
Here is a great webinar held on Vertical Spreads by Lee. What are Vertical Spreads? In a Nutshell Vertical Spreads involve two options of the same type, with the same expiration, but with different strike prices. One of the options is purchased (or long), and the other is sold (or short). Two common types of vertical spreads are the Bull Call Spread and the Bear Put Spread. Instead of just trading puts and calls, Vertical Spreads offer a way to limit your risk and/or cost.
We started off the month of September with a down day, but not as well off the lows. Today looks like another weak start, but seems to be like we get our footing and start looking to string some green days together. Seems the possibility of the ECB providing unlimited support to bonds helped stave off the negative news of Fedex lowering it's guidance.
We shall see how today plays out, here is what I am watching.
SINA/BIDU broke out yesterday. Had them on watch yesterday from the rumor of possible negative coverage by Muddy Waters. Turns out that was wrong and both stocks rallied. SINA also seemed to rally on a departure of one of its directors. Still think BIDU is headed over $118 short term and holding the $120 calls.
LNKD upgraded by Jefferies yesterday after the bell from $96 to $142. Seems Analysts starting to see what I have seen for months... a stock that should be $130-$150 by now. Today maybe the day it closes over $110. $115 calls maybe a nice play.
The rest of the market looks somewhat boring here PM besides FB, which I will not play.
Other stocks on watch : PCLN, AMZN, AGQ, NFLX, AIG, and FSLR.
Keep an eye on chat and lets have a GREEN day!
With the majority of earnings behind us, it can become challenging to find some volatile plays to make some money on. Pick the wrong trade and you will watch your premium erode. Finding stocks at the top or the bottom of a trend can be the best way to bank some coin.
Baidu (BIDU) fell over the past two weeks from possible competition for it's 80% share in the China Internet Search market. Qihoo 360Technology Inc. (QIHU) announced it was launching its own search engine, and analysts have estimated it could capture nearly 10% of the market shares in just 6 months, causing the decline in shares of Baidu (BIDU).
It looks like Baidu (BIDU) found a bottom at $111 last week, and is starting to bounce. We like the 50DMA and 200DMA as possible resistance points on the way up. We still like the Baidu (BIDU) story and hold the weekly $120 calls @ .25.