做多
Options Trading Series (RHT - Sep $120 Calls)
已更新
I frequently post my option trades on Seeking Alpha under the name: Soajustice (feel free to look me up).
I recently decided to post my trades here as well - I do it just for fun, for my own public track record and for others who may want to follow along and make some good money (I manage multiple portfolios and often share trade ideas with my family/friends).
Quick background - I'm a registered investment advisor and research analyst at small wealth management firm (~33B in AUM). I've spent many years analyzing the markets, doing both fundamental and technical analysis. I consider myself a technician/chartist.
However, I don’t use many indicators like most - it's distracting from the real picture. All I typically use is price action, volume, support/resistance, RSI and moving averages. I've learned over the years that if you need more than, say, 4-5 indicators to tell you how to position, you shouldn't be in the trade. Less is always more.
My options strategies are straightforward/simple and quite often yield very high returns. My strategy revolves around looking for price dislocations, overbought/oversold conditions, or catalyst that will place me on the right side of momentum (both long and short). I'll post some of my recent trades and logic behind them soon.
In my recent scan, RHT popped up as a prime candidate for an option trade.
This stock sold off from the high at $177 down to low at $130. The reason for the fall was that despite beating earnings, with solid 20% YoY revenue growth, guidance for Q2 missed expectations. The result was a massive selloff; yet the technicals suggest it was an overreaction (happens often, especially for high beta names).
Despite the sell off, the company has solid financials with reasonable debt levels and a MOAT to keep it afloat. Most analyst reports that I follow have a price target range between $150-$170, compared to today's closing price at $139.95.
As you can see from the weekly chart, the price touched the 50-day moving average and has since bounced back to the upside. On the daily chart the RSI shows extreme oversold conditions, touching a low of 20. The volume on a daily chart was also stronger than normal today.
This is a perfect set up for me – where the risk/reward is in your favor.
Today when the stock up about 0.85%, I decided to go long the Sep $120 Call (cost about $21.40 per contract). By the end of the day, the stock was up 2.21% and my position was up 8% (given the broad market rally).
As a rule, I typically sell my positions when I make between 70%-100% return (usually within 2-3 months). But it all depends on the speed at which I achieve that goal. On the downside, with options I typically hold until expiration if the trade goes against me; however, if the trade goes against me quickly, I typically sell when I'm down 20-30% to limit my exposure.
One of the things that I love about options is that I can define my risk; I can put up only what I'm willing to lose with less capital upfront. This allows me to take riskier more defined bets.
I see plenty of upside in this name. I will post results of this trade when I exit (gain or loss).
** Feel free to share your thoughts, insights, recent trades, or ask any questions, etc. I'm here to converse, learn more and share what I know! **
Cheers!
I recently decided to post my trades here as well - I do it just for fun, for my own public track record and for others who may want to follow along and make some good money (I manage multiple portfolios and often share trade ideas with my family/friends).
Quick background - I'm a registered investment advisor and research analyst at small wealth management firm (~33B in AUM). I've spent many years analyzing the markets, doing both fundamental and technical analysis. I consider myself a technician/chartist.
However, I don’t use many indicators like most - it's distracting from the real picture. All I typically use is price action, volume, support/resistance, RSI and moving averages. I've learned over the years that if you need more than, say, 4-5 indicators to tell you how to position, you shouldn't be in the trade. Less is always more.
My options strategies are straightforward/simple and quite often yield very high returns. My strategy revolves around looking for price dislocations, overbought/oversold conditions, or catalyst that will place me on the right side of momentum (both long and short). I'll post some of my recent trades and logic behind them soon.
In my recent scan, RHT popped up as a prime candidate for an option trade.
This stock sold off from the high at $177 down to low at $130. The reason for the fall was that despite beating earnings, with solid 20% YoY revenue growth, guidance for Q2 missed expectations. The result was a massive selloff; yet the technicals suggest it was an overreaction (happens often, especially for high beta names).
Despite the sell off, the company has solid financials with reasonable debt levels and a MOAT to keep it afloat. Most analyst reports that I follow have a price target range between $150-$170, compared to today's closing price at $139.95.
As you can see from the weekly chart, the price touched the 50-day moving average and has since bounced back to the upside. On the daily chart the RSI shows extreme oversold conditions, touching a low of 20. The volume on a daily chart was also stronger than normal today.
This is a perfect set up for me – where the risk/reward is in your favor.
Today when the stock up about 0.85%, I decided to go long the Sep $120 Call (cost about $21.40 per contract). By the end of the day, the stock was up 2.21% and my position was up 8% (given the broad market rally).
As a rule, I typically sell my positions when I make between 70%-100% return (usually within 2-3 months). But it all depends on the speed at which I achieve that goal. On the downside, with options I typically hold until expiration if the trade goes against me; however, if the trade goes against me quickly, I typically sell when I'm down 20-30% to limit my exposure.
One of the things that I love about options is that I can define my risk; I can put up only what I'm willing to lose with less capital upfront. This allows me to take riskier more defined bets.
I see plenty of upside in this name. I will post results of this trade when I exit (gain or loss).
** Feel free to share your thoughts, insights, recent trades, or ask any questions, etc. I'm here to converse, learn more and share what I know! **
Cheers!
交易开始
Quick update: Since I posted this idea a couple days ago, my options are up 51.92%.
This was achieved far faster than I expected. As you can see RHT hit the bottom range of analyst price target ($150). At this level, if you were inclined, it would be prudent to trim the position. For me, given how fast we got here, I'd hold on to my full position a bit longer.
If you are thinking about jumping in at this point, $150 is the last level I would be a buyer, although I would wait for a pullback closer to $145 before stepping in. However, given the momentum that might not happen.
Cheers!
交易手动结束
RHT options are up ~40%. Now that we are approaching expiration, I am closing this position that taking my profits. I may open a new position to play earnings later this month. I will revisit and post-trade if I decide to go long. Action: Close Position.
Congrats if you followed along, not as big as I wanted, but hey, ~40% isn't bad at all ;-)
Cheers!
注释
Good thing we exited this trade before earnings (they missed on revenue, which is one of the worst things you can do trading at such a high multiple -- full-year guidance looks ok). I will revisit this stock as it levels out.
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