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Friday, June 26, 2009

3 weeks to profit

Hey everyone

The call will expire in three weeks. There are 15 trading days left. The price of the stock has moved past and is now above the call price. As long as the price of the stock is higher than the call price, the call will be exercised at expiration. This will allow the program to take the funds from the trade along with the continued growing capital to form another trade with a larger pool of opportunities.

Technically, the chart shows that the stock is above the 20 and the 50 day moving averages as they are both increasing. The chart also shows the stock at a resistence level.

There is to be some scheduled news in regards to the company's products during the month of July. What is not known is whether or not the news will come before or after expiration day (the 17th.) So there is still some risk involved in this trade if news on products is bad.

The option itself is still priced above the norm. The stock would have to move over 10% just to catch up to the option price today to break even. The expectation for the relationship between the stock and the option is that they would be closer intertwined than they are now. The curve of the slope has not increased as is the norm. This action provides a clear bullish signal that the stock will end in the money.

Overall, so far so good. As this is the program's first trade, it will be nice to get the details to get some feedback. Yet, the hope is that this is only one trade in a long prosperous trading career.

-As always, I do not fully divulge information on open trades. When the trade ends, I will give out the rest of the details (stock name, price purchased, call purchased, news on company/ETF, chart info) that sort of thing. Please feel free to ask questions and I will answer them the best I can without endangering the trade.

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