8:52 PM
Ann Tucker
Market was closed for Holiday today. Markets open around the world were all down 3-7% today. Analysts are saying it’s a reaction to the US market being so down on Friday.
I’m expecting that the Market will open down tomorrow. So I want to find a position to play the slide down.
I looked at the stocks within the Dow for one that had 3 red arrows.
I’m expecting that the Market will open down tomorrow. So I want to find a position to play the slide down.
I looked at the stocks within the Dow for one that had 3 red arrows.
Hewlett-Packard (HPQ) has 3 red arrows. When I overlay the Dow (blue candles) on it, it follows fairly well. (There is an earnings report due 2/19/08 so will need to get out before then.)
Just looked at the available options on HPQ. Although there is a lot of open interest, there are only options available for 3 months in 2008, FEB, MAY & AUG. Don’t understand that. Not sure I want to get into this stock without knowing about why the limited options.
American Express (AXP) was the only other DOW component I could find with 3 red arrows.
Looking at the gap down on 1/11, I saw this news:
NEW YORK, Jan 12, 2008 (AP via COMTEX News Network) --Shares of credit card lenders closed lower Friday for asecond straight day after American Express Co. cautioned that the housing slumphas taken its toll on the American consumer.Late Thursday, American Express said spending on its more than 80 millioncards began to tail off in December. The company set aside $440 millionpreparing for more missed payments on credit card bills and expects a weakereconomy in 2008.
Maybe it has something to do with the market having been closed today. AXP only has options for FEB, APR & JUL.
I checked several stocks, and none have MAR options. Something must be off.
So, I am going to look at buying a FEB Put for both of these stocks.
HPQ is at 43.58
FEB 45 Put is 2.15
Expecting the market to open down, I will place an order at 2.25
AXP is at 43.05
FEB 45 Put is 3.10
I will place an order at 3.20
Since I have lost so much over the last month, I scaled back the amount of money I have at risk on each trade. Both of these trades together equal the amount at risk that I had been putting into one trade. I need to build up a strategy that works in this market before I go back to higher risk amounts. I’ve had one good trade with the 3 red arrows. Let’s see if I can have more.
NEW YORK, Jan 12, 2008 (AP via COMTEX News Network) --Shares of credit card lenders closed lower Friday for asecond straight day after American Express Co. cautioned that the housing slumphas taken its toll on the American consumer.Late Thursday, American Express said spending on its more than 80 millioncards began to tail off in December. The company set aside $440 millionpreparing for more missed payments on credit card bills and expects a weakereconomy in 2008.
Maybe it has something to do with the market having been closed today. AXP only has options for FEB, APR & JUL.
I checked several stocks, and none have MAR options. Something must be off.
So, I am going to look at buying a FEB Put for both of these stocks.
HPQ is at 43.58
FEB 45 Put is 2.15
Expecting the market to open down, I will place an order at 2.25
AXP is at 43.05
FEB 45 Put is 3.10
I will place an order at 3.20
Since I have lost so much over the last month, I scaled back the amount of money I have at risk on each trade. Both of these trades together equal the amount at risk that I had been putting into one trade. I need to build up a strategy that works in this market before I go back to higher risk amounts. I’ve had one good trade with the 3 red arrows. Let’s see if I can have more.
0 comments:
Post a Comment