Jim cramer didn't get his wish Oh well

It was a bad friday the dow finished down 281.42 to end the day at 131,181.91. The Nasdaq finished down 64.73 to end the day at 2511.25. Jim Cramer went on one of his rants for Ben Bernanke to lower interest rates. It looks like he did not get the answer that he wanted to...Oh well

Some changes that I think everyone will like

I am experimenting with some videos and charts to jazz this up a bit.

When I get the charts up, I think we can do some phenominal trading.

I hope everyone enjoys.

Cheers,

Ben

Wow the market laid a real stinker today.

Ok we have been looking at some plays. Now if this market heads into summer mode it could be a bad time to trade.

Let's sell puts on AAPL and GOOG.

Sell the Aug GOOG 500 puts for $4.90
Sell the Aug AAPL 120 puts for $1.35

I tend to think that the market will lay down a little while. I think GOOG will find some support at $500.00. If it breaks $500.00, ouch. We would definately put in stops at $500.00 for this trade.

AAPL will start moving again. I think it is safe at $120.00.

When will GG make it's break. Both GG and gold prices are coiling hard. It has been for a year but it has got to break out. It may not be for months, though.

Everyone have a good night.

RIMM ICE AAPL our observed plays.

Lets look at our observations. I was out of town for 3 days last week. I wanted to observe the AAPL play as it would have been profitable at that time. The spread on RIMM will is nearly fully profitable. The bid ask spread is high with the big drop so it would be hard to get the fills without legging out. ICE looks like it recieved a lot of theta (time burn). This is in a beutiful position to close. We will be looking at three new plays but keep your eyes on these stocks as it is one of the best ways to learn to play options. We will also discuss in depth the calendar and diagonal spread plays.

AAPL August 135/145 call back spread at a 1:2 ratio.

Short 1 Aug 135 call @ $11.40
Long 2 Aug 145 call @ $5.20
Net cost: $2.30
Cost to close: $1.00

ICE Aug/Sept 140 call calendar.

This looks like:

Short August 140 call at $14.60
Long August 140 call at $19.20
Net cost: $2.60
Premium for closing: $4.60

RIMM: 230/240/250 Aug short put butterfly.

Short 1 Aug 250 put @ $35.30
Long 2 Aug 240 puts @ $26.40
Short 1 Aug 230 put @ $18.30
Premium to open: $1.70
Cost to close: $.80

Observed plays on RIMM, ICE, and AAPL

The first trades that we will observe are some very risky plays. We are just watching so what the heck.

AAPL has been on a tear. They are announcing earnings on Wednesday. Now I will be the first to say that they are in uncharted territory right now. While I am bullish on AAPL, I would not normally make this bet as high as it is but a back spread will pay dividends if RIMM rises.

A August 135/145 call back spread at a 1:2 ratio.

Short 1 Aug 135 call @ $13.30
Long 2 Aug 145 call @ $7.80
Net cost: $2.30
Maximum loss $12.30
Maximum profit unlimited.
I like the premium vs potential profit. There is enough time to trade out of this position if AAPL decides to hang around the $145.00 range which is the max loss area.

ICE has been dropping lately so let's see if it tests the resistance right above $140.00. This right here is "seat of the pants speculation" but lets try a calendar.
What we are trying to do here is drop the value out of the front month and burn time premium.

The position that we are going to observe is a Aug/Sept 140 call calendar.

This looks like:
Short August 140 call at $19.30
Long August 140 call at $22.90
Net cost: $2.60
Potential profit is $6.00 to $7.00 but it can vary with IV and time left.
Maximum loss is the premium paid or $2.60.

RIMM: RIMM has been going up and it seems as though there is no stopping this stock. At chart tops, RIMM goes into a range and will oscillate in this range. I tend to think that it is very near the top but lets play it both ways and try to lock in some profit. I would not at this point play RIMM either upwards or downwards. I tend to think that would be a mistake.

Lets look at a short put butterfly.

Short 1 Aug 250 put @ $22.90
Long 2 Aug 240 puts @ $15.20
Short 1 Aug 230 put @ $9.20
Premium: $1.70
Maximum risk $10.00-$1.70=$8.30

I don't think that RIMM will stay anywhere near $240.00. It will swing quite a bit.


Everyone have a good night.

A quick link for historical option quotes

Following is a place that where a person can find historical prices on options:

http://www.prophet.net/quotes/options.jsp.

Take the contract and put a period in front of it and place it in the quote box.

Let's say that you are looking for a historical quote on GOPTU. You would place .GOPTU in the quote and it will give you a historical view of the days prices of the option. This site is free and it doesn't give you anything more than just price.

Everyone have a good evening