In general, people are really reactionary. Friday was the precipice or Armageddon and today is like a new bull market. Relax. We did not risk off and on in the matter of 2-3 days. Smart money positioned for a market correction pre BRExit, and my opinion is that the market was overextended anyways and would have corrected regardless of the vote outcome. VIX spiked heavily before any corresponding move in the market. Then when the market moved, VIX plummeted alongside. Now, you get a rally, which was expected (although not this ferocious). You have massive short interest out there, and the market is way overextended. I think the S&P never fell off by more than 4 points today during that surge. Last I hacked RSI was at 90 on the hourly and that is historic levels high, while off from pre-BRExit levels by a substantial margin still. It is unusual. Then you have FTSE higher than pre BRExit levels, in the face of UK losing their credit rating. The bottom isn't in.

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I started buying some bank stocks early this morning. Not going to use up everything in case things drop further, but looked like a good opportunity.

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I suggest making a simple excel sheet that plots the price of entry from the most recent highs. That is your initial value entry analytic. What is your strategy for the buys? Are you looking at a swing trade or hold/dollar cost average approach?

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I do keep an excel spreadsheet. I'd rather hold though. I'm not big enough into this day trading stuff like this group. I've learned to buy when people panic. It has done well for me...I just hope I wasn't too early.

I'd love to learn what you guys do, but there's a lot of craziness for an outsider to immediately pick it up and be dangerous with it.

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With the approach you are using my best suggestion is to learn how to sell covered calls. I'll give you a specific example of how to do it if you'll be the class case study. All you need to do is post your bank stock entry price with correlating symbol.

Did you buy through an online site, discount brokerage or regular broker? Trade costs? Do you have options capability currently? If not, I'd recommend getting the paperwork in place required to sell covered calls. If you want to wait until you see the example with your current buys made that's fine.

This what is called a good old fashion short squeeze. Look at those charts. No escape or room to catch your breath if you are short

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I started buying some bank stocks early this morning. Not going to use up everything in case things drop further, but looked like a good opportunity.

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I suggest making a simple excel sheet that plots the price of entry from the most recent highs. That is your initial value entry analytic. What is your strategy for the buys? Are you looking at a swing trade or hold/dollar cost average approach?

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I do keep an excel spreadsheet. I'd rather hold though. I'm not big enough into this day trading stuff like this group. I've learned to buy when people panic. It has done well for me...I just hope I wasn't too early.

I'd love to learn what you guys do, but there's a lot of craziness for an outsider to immediately pick it up and be dangerous with it.

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With the approach you are using my best suggestion is to learn how to sell covered calls. I'll give you a specific example of how to do it if you'll be the class case study. All you need to do is post your bank stock entry price with correlating symbol.

Did you buy through an online site, discount brokerage or regular broker? Trade costs? Do you have options capability currently? If not, I'd recommend getting the paperwork in place required to sell covered calls. If you want to wait until you see the example with your current buys made that's fine.

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I use etrade. I have a spreadsheet that models my current positions. I just have to update the current prices and everything up and down the spreadsheet will update as well. I've also got a section where I model a target exit price to see what my potential gains would be if I sold at those prices. The only thing this doesn't do well is model the dividend yield over the years, but that's a fairly small percent.

I do have the option to 'Sell Short' or 'Buy to Cover' with this account. The trade cost is $9.99.

Sell short and buy to cover - ok

What about the ability to trade options; specifically selling covered calls. For those who may not know what that is it is when you own shares of a stock and act as the market maker on your shares by selling the right to buy your shares (the option) at a certain price.

Example:

You 1000 shares of GS bought at $140. You see the gap down on June 23rd at $150. It is currently trading at $148.40 so $8.40 up from your entry. Not a bad 3 day gain. I will take 500 shares of GS and sell 5 $148 strike price call options out to July 8th (they expire next Friday) that are priced at $2.28 or $228/call sold, so you earn $1140 in premium for the right to buy your shares next Friday for $208. If the shares are far enough above $148 they get called out. Your effective profit is the $8.40 from entry +$2.28 for a total $10.68 per share gain (less commissions).

Now let's say GS drops back to $145 or $146 Friday July 8th. You still own the shares but pocket the $1140 in premium thus lowering your effective share price for your 1000 shares $138.86.

Now here's the fun part. You can turn right back around and do it again, and again, and.......until the shares do get called out or the stock doesn't have enough margin above your adjusted entry/buy-in price.

When seeing a short squeeze market like we have right now I will look at the gap and as we approach it will sell covered calls in the money. So instead of the $148 I'd sell the $147 options which are priced right now at $2.88 or $1440 premium received for 5 covered calls sold.

Lastly, if I was taking the sell 50% strategy I sometimes will sell covered call options deep in the money, so in the above example I would sell the July 8th $142 strike price for $6.90 or $3450 premium pocketed. If magic happens and we catch a reversal range move back down you sometimes pocket the $3450 and still own the shares for looking to the range move back up. Once you understand how the strategy works it is a solid strategy.

Questions? Comments?

I think I found a place where it will let me trade options. I can only find it under E*TRADE 360. It's got Basic Options, Spreads, and Buy-Writes. It allows me to Buy or Sell Open/Close.

If I enter GS, then I see the $148 you're talking about. I don't own any GS in my etrade account, so I'm guessing I can't use that one. I have to pick one of the stocks I currently own, correct? But either way, I did a preview to see what my options were.

I have a Call or Put option, and then I can pick an expiration date for the end of every week.

Yes, you only can sell a covered call on shares you own.

FYI......SPY is bumping right up against it's pre-drop gap number, 209.38. Tried 3 times here in last hour to break through. This would be where a Jul 8th Put around $206.50 for $0.73 is a decent risk/reward trade.

Well SPY took a little drop and they jumped already to 86 cents. Wouldn't chase. I entered at 73 cents when posted and would exit if SPY pushes through 209.38 before close.

It dropped back down to $0.78 and SPY is holding

Oldarmy and other technicians: How can you tell when an average or stock you are charting might be more likely to breakout above/below the resistance/support line? Is that possible or do you prepare for that possibility by setting up your trade so your downside is limited?

Will answer later

SPY had that late surge again and actually completed the gap fill. I cleared sell orders based on 1 minute rule.

I got puts for tomorrow. Today was end of quarter end of month machines going crazy.

Just circling back around.....

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I got puts for tomorrow. Today was end of quarter end of month machines going crazy.

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We're looking good early. SPY off by 22 cents.

See the shenanigans at the close? End of quarter, quarterly opex, Friday before holiday. Euro and pound tanked today, oil tanked a bit - no correspond move in the S&P. THis should be an entertaining Friday. I'm loaded to the gills short. So, oldarmy, manipulate is down please.

Keep in mind m, earlier when I looked, European market futures were surging huge.

Oldarmy-in your options example, does the buyer have the right to exercise at any time or only on the expiration date?

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Oldarmy-in your options example, does the buyer have the right to exercise at any time or only on the expiration date?

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The buyer of the option (your sold covered call) can "call out the shares" anytime from purchase date until the option expires. However, it is a very rare for shares to be called out early. The majority of options are viewed as a trading vehicle, although if a stock were to advance greatly in a short amount of time then it could be called out. I've done it myself. Bought a stock option at $8 strike that doubled in 4 days and I had 6 more days left. So I called out the shares and turn right around selling my own covered call option against the shares.

I mentioned this earlier, but will detail the trade because it is very close to the example OA1 is trying to explain.

After the BRExit drop I was pretty amazed that Barclays dropped 38% in two days. Sure when (if) the exit happens they'll lose business, but that's not going to happen for quite some time.

I purchased 1400 shares of BCS for 7.34 (this was two trades so this number might not be exactly correct).

I then sold 14 covered calls for July 16 at a strike price of 8 for 0.25. This means I collected a premium of $350 (minus fees). As long as BCS stays below 8 by the time these options expire I'll make a 3.5% return for the month plus whatever gain/loss I make on the stock itself.

If BCS climbs up over 8 and my options are exercised then I'll make 12.4% for the month (0.66 stock increase plus 0.25 premium on a 7.34 stock purchase). These options are priced extremely high right now. Typically you'll make about 0.5% per month selling 1 standard deviation OTM calls on markets and highly traded stocks.

Interesting approach Gator. I primarily take covered call strategy only once gains are at a point where I'm looking to juice my net gains. I would rarely immediately sell a call against an entry.

For anyone who bought Puts near close yesterday expect drifting on small volume. If we have a decent move downward I most likely sell half and lock in the gains. Historically speaking, first trading day after July 4th is positive. Not to be morose but these days we have to be wary of terrorist activity around our celebrations. I will nearly always hedge with put options, especially going into a 3 day weekend. If I can take gains on a portion of the puts today, thus offsetting much of the hedge puts I want to hold, then that's just smart business.

Did everyone stop out?

Free money increases the price of all asset classes, none more than gold and silver. Some countries have insanely gone with negative interest rates. Paying the bank to keep your money results in people buying almost everything. Abe of Japan is cranking up the printing presses. All governments print away the value of their paper money to cover up policy and structural problems.

It's a very dangerous time to be short with politicians in desperation mode to avoid deflation. Indebted countries can't afford to pay back debt (or, even service debt) with anything other than cheap (valueless) paper currencies. So they print print print. But printing money doesn't actually creat prosperity so they must print harder and harder to keep the illusion everything is fine going a little longer!

I mentioned to the board I bought the gold and silver miners. Look at their charts (any of them). Their bull run has clearly resumed.

Got out this morning...I sure wonder how long this can keep going up.

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I mentioned this earlier, but will detail the trade because it is very close to the example OA1 is trying to explain.

After the BRExit drop I was pretty amazed that Barclays dropped 38% in two days. Sure when (if) the exit happens they'll lose business, but that's not going to happen for quite some time.

I purchased 1400 shares of BCS for 7.34 (this was two trades so this number might not be exactly correct).

I then sold 14 covered calls for July 16 at a strike price of 8 for 0.25. This means I collected a premium of $350 (minus fees). As long as BCS stays below 8 by the time these options expire I'll make a 3.5% return for the month plus whatever gain/loss I make on the stock itself.

If BCS climbs up over 8 and my options are exercised then I'll make 12.4% for the month (0.66 stock increase plus 0.25 premium on a 7.34 stock purchase). These options are priced extremely high right now. Typically you'll make about 0.5% per month selling 1 standard deviation OTM calls on markets and highly traded stocks.

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I bought 1,000 shares of BCS at just under 7.2 the other day. Now I don't really know what to do next. I know it's not guaranteed, but I'd rather put something in where it's a safe bet that I keep most of those stocks since I bought in so low. You guys seems to be able to keep most of your shares.

Thank you for offering up the advice. Can you tell me more about this call option?

-Who do you place the option through?

-Does that service provide live option quotes?

-Was the $2 premium for a 100 share option?

Sorry in advance for my lack of knowledge.

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Thank you for offering up the advice. Can you tell me more about this call option?

-Who do you place the option through?
Options are placed through brokerages. Virtually every brokerage offers options services. Typically you will need to apply to enable options on your account. For example, Fidelity will ask, among other things, are you or family members serving on a board of directors, are you employed in investment banking, what is your net and liquid net worth, how many years experience to you have trading stocks, mutual funds, covered calls and puts, naked calls and puts, etc, etc. They will review your app and either approve or deny it typically within 3-5 days. If you get approved, the actual operation of placing an option order is facilitated just like buying/selling a stock through your brokerage dashboard.

Based on what you are trying to get approved for (say covered calls vs naked calls), brokerages will vet these applications more rigorously.

-Does that service provide live option quotes?
Yes, virtually every brokerage will provide you with access to live quotes and tools to analyze option trading strategies. It's just like researching ticker symbols typically. Also, if you want to see what live quotes are without opening an account (assuming you don't already have a brokerage account), just go to Yahoo Finance, et al, and click on 'Option Chain' at the left hand side of the screen. You can select different dates of expiry and scroll through put and call pricing at different strike prices. I would recommend with becoming intimately familiar with the option chain and its different terms and columns before attempting to place trades.

-Was the $2 premium for a 100 share option?Premiums are paid per share. So if you are reading the option chain and the Bid/Ask/Last says something like $.50/$.55/$.53, it means that that is the current bid/ask spread and where the last option with that date and strike was sold for. Take that premium number and multiply by 100 then subtract any brokerage fees to calculate the cash received from opening that option position. This is your net premium.

For example, if you sold covered calls on 500 shares of $TWTR, for example, and received a premium of say $1.00 per share, your gross receipts from the premium would be 500 shares * $1.00/share = $500 received for the sale of 5 covered calls. Then you would net out any brokerage fees obviously to calculate your net gain.

Sorry in advance for my lack of knowledge.

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Hopefully that clears stuff up a little. Also, if you are considering pursuing an options investing strategy, the web is a great tool. No shortage of info out there.

Thanks! At this point I'm still very much in education mode. At some point I intend to set up a trade account to play with and want to understand more trading strategies than buy and sell.

There's the attack people were guessing could happen...not US soil, but another possible terrorist attack. This time in Bangladesh.

Well ****

Looking for something to correlate with this rally. Bond yields at post BRExit lows and near all time lows. Gold way up. GBP and EUR near BRExit lows.

S&P has run away from everything. Volume one sided on buy but also diverging with the run. RSI, MACD, momo, divergence. S&P wedging into the top towards the 2125 full retrace area right into the overhead supply.

I look for volatility to continue to range wildly and trend upward.

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Well, S&P500 closed at a lower low and under the 50MA. To my novice mind, those seem to confirm that we are now intently heading to challenge the 2040 support. For some of the more experienced folks on here, what do you expect in the coming weeks?

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Markets will continue to be volatile and unpredictable.

That is my prediction.

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My prediction is looking pretty good so far.

Max pain is an ATH followed by 1800, so that's what I'm predicting