Trading Review Up to October 12th Mid-day

Posted by Oskar Syahbana
10/12/2006

I’m going to cover stocks or options that I haven’t have the time to post about (especially the one that I’m -virtually- holding). So here it is:

CKR buy call at $15. I got filled at $2.35 and the current buy call price is at $3.9. This trade is very text book. I’m looking for a company that is very volatile with alot of liquidity (but remains a small cap — this is actually my knack). What I forgot at first is that the options market for this one isn’t very liquid (not much people trade the options), so my first though is, “Uh-oh… I entered the wrong trade!” But it happens that the price keeps going up is a good sign that this is a good trade. However, I don’t look at any price chart to buy this one since I’m not only entering the trade with buy call, but also buy put (well you know, newbie mistakes :P)! The buy put contract ended up loosing $1.15 (worthless because of time decay).
MSFT, buy how I love this company (both its stock and their products — hey, don’t look at me like that…). I bought this company’s stock at September 15th at $25 and sell it at something around $27.5 — mind you I haven’t journalized my trades on a blog back then. A good $2.5 profit per day ;). Again, on the stock, I only use a simple trading method (mainly golden cross or dead cross — or is it death cross?)
CKR, woops, this company just never stops. The same day I bought MSFT, I shorted this stock at $17.5 and covered my position on September 19th at $16.37. Cool profit, not big, but still cool ;)

Loosing stocks:

Okay for loosing stocks, I’m just going to list it here and from there go to why that particular trade failed. I’m going to generalize here since I haven’t journalized my US trade at that time and most of the mistakes on picking and positioning (plus timing) has a sign of newbie mistakes everywhere. (PS: also check out my post here) So here it is:

ADBE, straddle position on September 14th call strike price $30, put strike price $35 (both for January expiration). The case is almost similiar to CKR above. I haven’t know what volatility can do to the stock price. There’s no major announcement near that date and so the volatility is somewhat small. Not very good for straddle.
GOOG, when I see that Google’s stock is on sideway move, I’m pretty sure that it will go back down after it reached somewhere near 400 as it is in the past. However, I failed to realize that the price range of Google’s previous top is quite big (around +- $20) in value. So when I entered a buy put position on September 29th heading for only 1 month expiration date and at the wrong strike price, the trade is doomed (strike price is at $400). I also have a buy call contract with Google that I don’t ride long enough. I only profit around $0.6 (options) which can actually go higher.