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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 691.72

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Jan 16 4:00 PM EST

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To: penthouse mike who wrote (44762)	1/28/2013 12:47:28 PM
From: expiredoptions	Read Replies (1) of 221991

RE Mike: I was looking for a 25% profit on this countertrend put trade. Here is my management method: If an option rises 20% after filling, I move my stop to breakeven. If an option tanks immediately after filling, I will buy it again -25% below the first buy. Let's look at today's countertrend trade: The SPY Feb151 puts opened at 1.83 (filled) and went straight up to 2.25 (+23%). My profit goal was 2.29 (+25%) so it didn't make it. Because the options went straight up +20%, my stop is now breakeven. Here's what would have happened if the options had tanked immediately: Buy 1: 1.83 Buy 1 Sell Limit: 2.29 (+25%) but if tanks immediately then Buy 2: 1.35 (B1 -25%) Sell Limit: 1.90 (+40%) Stop: 1.20 So I am sitting here on these puts with a sell limit of 2.29 (+25%) or a Stop of 1.83 (breakeven). On the trending direction SPY Feb149 calls bought at 1.95 (system 2), My sell limit is 2.45 (+25%). There hasn't been a 20% rise on these calls after filling but if that occurs my stop goes to breakeven, Otherwise the plan is: Buy 2: 1.45 Sell Limit: 2.03 (+40%) Stop: 1.30 Jeff

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