14-11-07 : Long Coffee

Long Coffee @ $122.95.
Profit @ 130
Cut @ 118
Risk:reward = 1:2
Duration = 20 days

Alternative Exit method : Go by 15min channel
daily
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15min
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14-11-07 : MA trade tonite

If the uptrend continue tonite with bullish sentiment, then its time to go for a call in MA, RIMM or AAPL. among the 3, MA has higher chances of going up.

MA daily
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MA 15min
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14-11-07 : GS trade tonite

GS may be considered reversed back to uptrend. Its already 3rd day on the
15min uptrend channel.

May go in for a call if the price stays within the channel.

Daily
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15min
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14-11-07 : Compare GOOG diff expiration options

Remember that just 2 nights ago on Mon, the Nov $650 put went from 5.80 to as high as 28.10, before closing at 23.50. That rush in price is equally matched last nite when it gapped down to 15.70 when opened, and fell all the way to 5.20 upon closing.

With just 3 days to expiration, I think its game over for this product called "Nov07 $650 Put". Thats the nature of the expiration month option. Up fast, and down faster.
Those without a strong heart dont play this type of options.

Dec07 $650 Put on the other hand, display a less volatile behavior.
It went from 24 to 43 ($19 rise (79% rise)).
Compared this with Nov put ($22.30 rise (384% rise)).

When Up :
Dec put : +$19 (+79%)
Nov put : +$22.30 (+384%).
Diff in $$ = $3.30

Jan put : +$20 (+66%) ($30 to $50)
Diff in $$ = $2.30

When down?
Dec put : -$16 (-37%)
Nov put : -$23 (-82%).
Diff in $$ = $7

Jan put : -$14 (-28%)
Diff in $$ = $9

So,
If u r right, u gain about $3.50 more with Nov put (compared with Dec)
If u r wrong, u lose $7 more with Nov put (compared with dec).

So if u r right, Nov option rewards u much more. If u r wrong, Dec option will save your ass.

So r u offensive player? or Defensive player?
In dollar value, its safer to play Dec option (1 mth expiration).

But again, if u dont have time to monitor, Max u can lose for the option is ur total option costs.

Max u can lose for Nov option is $5.80.
Max u can lose for Dec option is $23.
Max u can lose for Jan option is $30.


But its never wise to NOT watch the market. So, i guess its still better to play 1 mth expiration at least.

For me? I will choose Dec07 option based on optimum risk:reward perspective.

So, this is the conclusion of FC's point of view (always get expiration month option) vs my point of view (always get 1mth expiration option)

Buying Nov option can be argued this way :

If u gain u can gain $23 (384%). if u lose u can only lose $5.80.

Buying Dec option can be argued this way :
If u gain u can gain $3.50 less than Nov option.
If u lose u can lose $7 less than Nov option.
Thus risk of getting Dec07 option is half of that of Nov07 option.

So, which side are you at ?

Nov07 $650 Put (4 days towards expiration)
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Dec07 $650 Put (29 days towards expiration)
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Jan08 $650 Put (49 days towards expiration)
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