Google has only [seven] more trading dates to hit the $850 sweet spot of four March 840-850-860 butterflies that we hold for just 0.20 each. Even a one-day downdraft will squash our odds of profiting, but because we’ve got so little at stake we can afford to let it run. The ‘fly is currently quoted on a bid/offer of around 0.30/1.40, which means we’d have to work pretty hard to come away with the $480 profit we’d reap exiting all three sides at the best possible prices (i.e., “on the offer”). However, a mere $15-$20 rally by week’s end could make the spread an easy sale for perhaps $2.50 or more, so we’ll give it a few more days. We should take encouragement from how well the stock moved yesterday in a market that felt heavy with indecision, as well as from the 848.29 rally target shown in the chart. ______ UPDATE (1:52 p.m. EST): Exit one spread or 25% of the position for 1.20 or better. A chat-roomer just reported having done so (for $1.30) to cover the cost of the remaining position, and it’s a good idea. Click here if you want to join in the fun the next time we try something like this. _______ UPDATE (March 5, 8:49 p.m.): I’ve reproduced a snapshot of an option calculator that can help you determine ‘fair value’ for the butterfly with Google trading today anywhere between 838.30 and 852.30. For instance, if the stock is at 846.30, the March 840 call we’re long would be worth 13.65; the two March 850s we are short, 8.51; and the March 860 we are long, 4.88, yielding a butterfly theoretical value of 1.51. _______ UPDATE (March 11, 1:55 a.m. EST): We’ll play this one down to the wire and for all the marbles, since it is only with GOOG trading slightly above 850 around midweek where our payoff will push above the 15-to-1 odds we so richly deserve.
Comments on this entry are closed.
Click here for a special deal for graduates of the Hidden Pivot Course who want to stay on the cutting edge
Tuesday, March 13, 2018
The consistent accuracy of Rick Ackerman’s forecasts is well known in the trading world, where his Hidden Pivot Method has achieved cult status. Rick’s proprietary trading/forecasting system is easy to learn, probably because he majored in English, not rocket science. Just one simple but powerful trick -- managing the risk of an ongoing trade with stop-losses based on ‘impulse legs’ – can be grasped in three minutes and put to profitable use immediately. Quite a few of his students will tell you that using ‘impulsive stops’ has paid for the course many times over.
Another secret Rick will share with you, “camouflage trading,” takes more time to master, but once you get the hang of it trading will never be the same. The technique entails identifying ultra-low-risk trade set-ups on, say, the one-minute bar chart, and then initiating trades in places where competition tends to be thin.
Most important of all, Rick will teach you how to develop market instincts (aka “horse sense”) by observing the markets each day from the fixed vantage point that only a rigorously disciplined trading system can provide.
The three-hour Hidden Pivot Course is offered live each month. If it’s more convenient, you can take it in recorded form at your leisure, as many times as you like. The course fee includes “live” trading sessions (as opposed to hypothetical ‘chalk-talk’) every Wednesday morning, access to hundreds of recorded hours of tutorial sessions, and access to an online library that will help you achieve black-belt mastery of Hidden Pivot trading techniques.
The next webinar will be held on Tuesday, March 13. Click below to register or get more information.
Stocks Plunge on Word of Little Nell’s Death
Hourly Charts Hold Key to Big Picture
Stocks Will Have Economic News to Contend With in Days Ahead
Beware of Dow 26,734!
Markets Go Bonkers for a New York Minute
Dollar’s Rally Turning into a Dead-Cat Bounce?
What the E-Mini S&Ps, Boeing and Amazon Can Tell Us
Rebound Less Impressive Than It Seemed
What It Would Take to Exhaust Sellers
A Mixed Bag — of Explosives