Monday, August 23, 2010

UPDATE Trade: ETP Short via Puts...Winner!

I decided to take my ETP short position off today based on the fact that after 2 days of trading since the gap follow through had occurred (of course as soon as I was out of my position...down it went). On the gap down the other day it also failed to make a new low...which doesn't inspire confidence. I have also seen lots of gap downs based on new offerings turn rapidly higher.

Also, I had seen good profits go bad twice with this position...Besides that I was looking at the hourly chart and it had violated on CCI (this is a new indicator I am looking at based on Headley's Options Sniper program).

In any case, ETP has been good to me and I exited at $3.10 per contract..60 cents...and I generally had 6 contracts accross the accounts...$360 profit...not earth shattering...but good none the less.

Headley also presses the idea of time based that you can rotate your capital to the next trade that is in the early stages of rallying. So I am starting to exercise this a little more with things that are getting stale. Also left BVF today because of that.

I will say one thing. ETP has NOT flashed an exit based on the 4hr or Daily arguably this is a premature exit.



I desperately needed short exposure because I was net long and all the retirement accounts can't actually short stocks...problem is, because of liquidity, there are few options out there to suit the needs of these accounts.

Yesterday I was running my scans to see what had retested the day before or what was breaking out. In this case ETP was breaking out but not quite on the daily I checked the 4 hr chart...breakout had been confirmed...and towards the end of the day it looked like it was retesting...It reached like 19 and change on %R...I figured this was good enough for me as these options are very liquid and had decent bid-ask spreads.

Picked up the September $50 Puts for $2.50 per contract...stop is $2.00. The ask was $2.85 when my order got filled, so I figure to set the trigger at a bid of $1.80...I should get filled at $2.00




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