Resources

15 July 2014

Some questions to start the night:

• What are your go-to resources for trading?  
• Do you follow anything with unfailing devotion?  
• What keeps you up-to-date on the markets, the economy and everything else?
• What books are your currently reading?

Aside from the charts in TOS (thinkorswim - the trading platform - not to be confused with Star Trek: The Original Series), I'm a fan of Yahoo finance.  It works to give me a snapshot of what is happening, decent headlines and such.  I don't just trade on the charts in a vacuum.  Rather, I try to temper with what's happening in the outside world as well. 

Since I'm still in the learning phase, I'm attempting to absorb and learn as much as possible.  It can be very overwhelming.  I've been trying to read Bill Johnson's Options Trading 101: from theory to application.  Nick, my husband, started it a while ago, and I stole it, but never finished it.  I've reserved it from the library again, so once I get it, I'll try to read it again.  Maybe I'll get more out of it this time since I actually have a bit more training and have been doing it for a tiny bit.  Have you read this?  Is it worth it?  What do you think?

In the meantime, a coworker has loaned me Think Like a Freak by the Freakonomics gurus, Steven d. Levitt and Stephen J. Dubner.  I enjoyed Freakonomics, and I'm looking forward to finishing this one.  Then there's the reading I'm doing to stay on top of my profession.   I'm working on some new skills and attempting to improve existing programs,  so I am trying to read everything I can get my hands on with relevant material.  It keeps life interesting.  I wish I had more time to read!  

For fun, I'm reading Nichelle Nichols autobiography Beyond Uhura: Star Trek and Other Memories.  I got to meet her at the Creation Entertainment Chicago Convention this year.  Just for a few moments while she signed my book.  She was so nice and genuine, and she said that she hopes I enjoy reading it as much as she enjoyed writing it.  So far, if she had half as much fun writing as I'm having reading, she must have had a GREAT time!  But I digress...

Other sources I review when I have a chance related to trading, news and market conditions (in no particular order, and some do cross into many reasons to read including application to my professional life as well!):
Wall Street Journal
New York Times
The Economist
Financial Times
Money Magazine
Fortune
Google finance
tastytrade
dough 
TD Ameritrade
Scottrade
Investopedia

The Motley Fool

And I think that's it.  I don't read them all every day or even every week, but I do glance at them every now and again.  Especially when I'm confused about something, or looking for some specific information.  

Tonight's Trading for tomorrow:

And now for the purpose of this blog -- what I'm doing in my trading today.  

First off -- I'm really excited that I finally figured out how to put a conditional order on!  Hurray!  (Thanks training class this past weekend!)  I can now set up my order contingent on the stock movement, which will hopefully give some confirmation that the stock is actually going to do what I think it will before getting into a trade.  I've got to do a bit more finessing on it, but I've got the basics, I think.

The first thing I did tonight was check my active trades.  

•     MU

I only have a vertical on MU right now.  I sold the August 31/32 put spread, and it went on today.  (It was my experiment yesterday with actually figuring out conditional orders and getting the technical actions correct.  It worked!  It's on!)  I put the stops on using a GTC, OCO order to close.  

For everyone like me who was utterly confused by the alphabet soup that comes with trading, and there's a lot of it, here's my quick translation:

     GTC = Good To Close (always important with stop orders so that they continue beyond the one day until conditions are met and they actually close.)

     OCO = One Cancels Other (again always important)

I'll talk more about the rules Nick and I have in place for stops in my next post, but briefly, we set up one stop at our profit goal and one at the max loss we're willing to accept on this trade.  

Next, I started looking at our list of go-to stocks/ETFs, etc. that we've been using the last three months in an attempt to find positions that fit our rules and let me practice the conditional examples. Here's my thoughts as I reviewed these:

• YHOO -- Earning were reported today after market close.  I haven't studied them, but there seems to be a bit of a mixed bag in there with some good and some bad news, at least according to the news headlines.  It looks like this has been sideways trending stock over the intermediate term with short terms ups and downs.  Initial thoughts include perhaps a wide Iron Condor to capitalize on the sideways nature of the stock, or selling a call vertical thinking that the stock will continue it's short term downward motion.  However, I'm not sure what the earnings report are going to to the stock and the options overnight, so I'm going to hold off on doing anything with this one for tonight.  Maybe something tomorrow.
• 
  
• GLD -- Nick thinks that this is going to continue to go down, so we're looking at selling a call vertical.  I ran my checks through Yahoo finance, and google searching, and I think he's right.  Plus, according to the limited technical analysis I have, the last two days of candles looks like bearish engulfing to me.  So we're going to go with it.  
• Is there a call option that fits our rules?  YES -- the August 14 127/128 Call Vertical.
• We put a condition on that the price of the underlying itself must be at or below $124.16 before the trade will go on.  This, we think, will confirm the bearish engulfing candle pattern I think I'm seeing.  I'm viewing this as adding another layer of safety to our trading.  If the underlying doesn't get that low, we don't get in.  Which is great!
• I adjusted the option price that we're willing to sell at down.  As the price changes in the downward direction we want, the option price will change.  Based on my experience yesterday, I adjusted it down by $0.05 from the current mark of the option vertical.  I know there's a more scientific way to do this involving delta and gamma and all that, but I don't understand it yet, and my nickel theory worked once before.  So we'll see.  I have to work on this more and get it figured out for certain, but this is more of a practice trade for me to see what happens.  (At least it's paper money!)
• 
  
• VZ -- Looks like it broke a sideways trend into a definite upwards trend.  But the question is do I want to get in now?  
• There's only one put option available that fits our delta rules, and that is the one right outside the money.  That's too close for our comfort, so we're passing on this trade tonight.
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• ZNGA -- There's not enough volume in these options, which breaks one of our rules.  No trading on this one tonight.
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• AAPL -- Looks like that resistance ceiling is hard to break, and that they're going to have a short-term pull back.  So let's see what happens if we can get in on that by selling a short call vertical for August with $98.57 and $99.29 strike prices.  I did put a condition on that the underlying stock price must be at or below  $94.83 before entering the trade.  Again, I adjusted the price we're willing to sell the contract at down slightly, and we'll see what happens!

That's what we've done tonight.  I'm calling it quits right now because my eyes are blurring and I've got an early run tomorrow calling my name.  

For tomorrow's trading:

1.  Check what we got into and put on stops.

2.  Adjust stops on existing positions, if necessary.

3.  Look at this list from tonight and see how things are looking with these.

4.  Try to figure a bit more about the delta and conditional orders.

Happy Tuesday Night!