Friday, June 15, 2012

Friday's Best of the Web 6/15/12

Got a lot of positive responses from last weeks' Best of the Web post, so here is this week's edition.  All three articles come from Twitter friends of mine.  If you follow me on Twitter, all three are must follows as well.

The first comes from Racernic.  Nic has a very similar trading style to mine, but also tends to include indexes in his trading repertoire, particularly $RUT.  He also makes a lot more weekly plays than I do.

Nic's article explains his bullish bias on $AAPL, with the key point being: "My thesis?  Simply put this is a company that sells every trinket it makes at a premium, and ALL those who don't own its trinkets want them..."  He's absolutely right.  Apple fanboys (and girls) tend to be the biggest of them all.

He also goes into a little detail regarding the CCI technical indicator: "Thought it's not a guarantee (as direction can turn on a dime), the CCI can be clear as to when NOT to buy."

For the rest of the article, visit Nic's blog here, or click on the picture.

The next article comes from BookingAlpha.  Book runs his own subscription trading service, and at $14.95 per month, is VERY reasonably priced.  One winning trade could cover a year's subscription.

Book also likes to trade index options, but in his article describes how one can use ETFs and mini-indexes as a substitute.  This is for people who prefer the smaller margin requirements of these products.  It is also good for someone like me, whose broker charges additional fees for trading index options.

"Today's NDX spread was 25 points wide requiring $2500 margin requirements per spread traded, less the credit received for opening the trade.

$2500 per spread may be a little steep for some traders.  So, as an alternative to lower the per spread margin requirements, one could substitute the MNX for NDX.  The MNX is the Mini-NASDAQ 100 which is 1/10 the size of  the NASDAQ 100; much like the spy etf is 1/10 of the S&P 500 (SPX)."

For the rest of the article, visit Book's site here, or click on the picture.

The last one comes from Crap_Trader.  Like me, he trades a lot of individual security spreads and condors.  He also trades diagonals, a strategy I plan to start employing more of, even if only on paper.

Crap's article talks about his planned entry point on a LEAP call to initiate the diagonal position.  In this case, he is using British Petroleum (BP). 

"I’ve decided to take on an ITM 2014 LEAP Call postion and then write monthly calls on it to recoupe costs and generate some income. I would plan on rolling the short calls once they go ITM, and would let any OTM short calls expire worthless.  I think I see an entry point coming if the stock comes down to a support level that I like and reverses upwards after it bounces off the support."

For the rest of the article, visit Crap Trader's site here, or click on the picture.

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