Sunday, November 13, 2016

Analysis of Holdings as of November 13, 2016

Current Holdings (Nov 13 2016):
1. Visa (V): I own Dec 16 80 calls that were bought for 3.50. They closed at 2.92, so I am underwater as of this writing. My thesis is week, I have to be frank. The weeklu chart shows some form of a possible move higher from the last weeks support level of 80. Plus I can see a bullish wedge formation that might move this name higher. We will see. The plan of action for the next week is to watch carefully, and in the case of inverse move lower, I will just bail. I decided to start with v as my thesis seems to be very weak. So I consider this trade as amistake.
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2. Nike Inc. (NKE): I own Dec 16 50 calls, that were bought for 1.60. Calls closed on Friday at 1.65, so I am slightly above the water and in the green. Here is the analysis. Daily chart shows a bounce from the 50 level, which is a strong support level. But on a shorter(1H) tmeframe, we see that 51 now has become a resistance level. I expect that this name to move higher with a b/o from 51 level, or else I am gonna just bail.
(click to enlarge)
3. Home Depot (HD): I own Dec 16 130 calls that I bought for 3.06, and they closed on Friday 3.15. 130 seems to be a resistance level, that I anticipate it to break higher before the ER on next wednesday.
(click to enlarge)
4. Sstarbucks (SBUX): I own Dec 16 52.5 calls that were bought for 1.80, and they closed at 1.97. Thesis for SBUX is simple, on a valuation basis, it's inexpensive and I apln to hold it for long time.

Tuesday, November 1, 2016

Controlling Risk in Trading Options

Trading is not complicated. All you have to do is wait for a really high probability opportunity and swing it. However, in reality it's not as easy as it may sound. For one, what part of capital one should use per each trading opportunity? What kind risk measures to take? How to determine the price target objective?

Al these questions are important in of themselves. But, the one issue takes the precedence over the others. It's the risk.

Any trade, however profitable it might be, without taking a risk measures, it's not sensible to take it.

But, how to control risk? What are the ways to take risk under control in taking a position?

Size of a Position

We agreed that for any one trade, in considering whether to take it or not, we should first calculate the approximate amount of risk per this given trade (I am deliberately leaving technical matters aside, as they might confuse readers). After admitting the risk, we can proceed with structuring our trade..

To achieve our goal, we can take as small position as we feel comfortable. This concept perfectly works in the options trading. Because, in options (if we trade directional call or puts), we can take the size of a position as a risk per trade. Therefore we can take the total size as a sum we can feel comfortable losing.

April 2, 2017 Astana, Kazakhstan Frist Quarter (Q1) 2017 Update Report Dear Partner, During Q1, the Green Valley Fund (“GV...