Stock, Option and Futures Trading
BIDU 140 calls .71
June 2, 2011
If you played the BIDU weekly 140 calls the entry was .40 cents. As of the close today the calls are at .71 cents that is good for a 77% gain. We were looking for BIDU to be at $142 by the end of this week so we might get that tomorrow but we want to always sell weekly calls on Thursday.
If the market did not have the move down yesterday BIDU would most likely be sitting at our target and the trade would have been around 300%. Not all trades are the big winners but we will take a 77% move in a matter of a few trading days.
Next week will be better as we will have the full five trading days.
AMZN was not filled so we will watch it next week along with NFLX and GOOG.
Have a nice weekend,
PS. The NFLX weekly calls had a range of $3.00 today. Weekly options are a great way to day trade or swing trade for 1-3 days but like I have said before you are risking the entire option in most cases. Losing 100% of the option premium is just like taking a full stop on the trade if you traded it with the shares. If you try to place a stop on the option at the same time you enter you have very high odds of getting stopped before the trade had a chance to work. Trade the chart not the option premium.
PSS. BIDU is a good example the option opened today at .10 cents and then went to .75 cents. That is a intra day range of 650% today alone with over 9,000 contracts traded.