Options Trading ( 1 of 50)

If you dont understand stock markets reading further will be a waste of time:


Well my trading account has a balance of USD 607.26 to be precise and accurate...
And I am on my mission to resume trading after a long break...

Now that we are in a different time zone...I can begin trading only at 2:30 PM and I need to be out by 3:00 PM to pick up the kids....so its a lot harder to trade.....

Nevertheless...I have to try and see if it works...I realised the US market open only at 2:30 PM just today...always thought they opened at 1:30 PM UK time....

So I did my wee litle bit essential Home work.

I trade only DIA....

Which month option to buy...well checked that May options expire on May 15th so I can safely trade till this Friday....

Buy May Option

World Markets have gone up...but there is significant news before the markets open...

So PUT or CALL...somehow I always feel comfortable buying PUT options and also since there is a mixed bag of news I thought let me go the PUT way.

I identified the option as +DAVQG ( May 85 PUT option closed at 2.15)

So I was all set Futures were up which means markets will open significantly open up ..but I was convinced there will be a pull back...

So as expected the option opened at 1.64 ....I placed an order for one contract and finally bought it at 1.65 at 2:31 PM (UK Time) I place a sell order for 1:80 following my thumb rule of max 10% profit....and I was filled at 2:40 PM...

So in a nutshell :

Bought+DAVQG at 165 Sold at 180.Profit of 15 less commission 2 = NET 13....
Day over...a return of 7.5 per cent in 10 minutes(sound too good to be true!)
Needless to say the option continued to go up as the markets for the day fluctuated upto 2.10 ( I sold at 1.80)...Now keep reading and you will read about the big loss days too...

I was happy I posted to my blog both for the "31 posts for 31 days" and my trading summary.