Why am I doing this? I am hedging my bet that this comes back, but not dangerously as I am not playing with call that expire today anymore. I used them for a quick recovery, and now they are too dangerous as they are going to expire today.
With a call that expires in two weeks, this will give me some padded time in case the market continues to crash on Monday. And if the market bounces, I exit this. Here is my in:
Now I would like to talk about how I take advantage of strike prices as they can be a very potent weapon in a traders arsenal. For example, on one of yesterdays posts I said that during normal days (unlike today) I like to purchase an end of day order about a week or two out and hold overnight. This allows me some time in case if fresh adversive news comes out pre market about the Asian markets or a bad market report preopen. Then during the day after the gap at about 1030 two hours after market open (central time here in chicago) I then like to go with the momentum of the market and go with a daycall or a dayput that expires as soon as possible. With a strike that is about to expire ( that day or the next day if possible) I get maximum movement in price. Seeing that during the day there is no huge announcements that can derail the daily momentum like there is before market open this tends to be a safer bet so I take on more risk with a very soon to expire option to get bigger moves to offset the end of day option that expires in a week or two from the day before if need be.
See what I am getting at here? There is another way besides doubling down to hedge your bets, there is the increased volatility in closer option expiration dates that can also allow you to hedge.
So I am going to hang back here at this point and come back about 15 min before close to measure the markets and give my reconn.
Tradinginsider
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