BarTune1
441 posts
msg #130401
- Ignore BarTune1 |
8/12/2016 3:03:08 PM
Kevin,
When I can't borrow, I sell near-term calls deep enough in the money such that the delta is close to 1. Like with a $8 or $9 strike. Good proxy for going short when the shares are not otherwise available to borrow.
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Kevin_in_GA
4,599 posts
msg #130402
- Ignore Kevin_in_GA
modified |
8/12/2016 3:05:34 PM
You know me and options ... I take this as a sign to stay out of any further trades on REN and let my current position play out.
Besides, my positions in MTZ and GOGO are reverting and I have nailed a few long trades off of Pangolin Z, so net I am feeling good about today.
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mahkoh
1,065 posts
msg #130409
- Ignore mahkoh |
8/13/2016 3:53:25 PM
Bartune, how would that work? The spread on the 9 strike is almost $2 and you can't expect a quick fill at the midpoint. I think you would at least lose $1 on the spread
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BarTune1
441 posts
msg #130411
- Ignore BarTune1
modified |
8/13/2016 7:22:35 PM
mahkoh,
Ignore the spread ... the market makers will fill the order if the price you offer is even a couple of cents below what the stock is trading at .... I have REN closing at 14.43 .... you could put an order in to sell $9 strike calls at $5.40 and they will fill .... on near term expiry, delta will be close to 1.
If REN dropped to 13.43 .... you could place an order to buy back at say $4.50. You'd then make say 90 cents per share ... or $90 per contract.
I've been shorting REN in 600 share increments so I would have sold 6 contacts. That being said, I use TD as a broker and have had no problems borrowing.
One I haven't been able to borrow is CMCM so I sold 6 $8 strike contracts on Friday for $5,30 .... equivalent to shorting the stock at $13.30. Its now at $13.26. If it say drops in the $12 range I can buy the contracts back for $4 and change.
Calls have to be relatively near term and deep enough in the money so the delta will stay around 1. Not as efficient as shorting the shares directly but works as a good proxy if you can't otherwise borrow.
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mahkoh
1,065 posts
msg #130417
- Ignore mahkoh
modified |
8/14/2016 4:36:14 AM
Thanks, Bartune. Makes sense.
BTW, why are you shorting CMCM at this price? I don't see resistance until 13.70 - 13.90 ?
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BarTune1
441 posts
msg #130429
- Ignore BarTune1 |
8/15/2016 11:06:19 AM
mahkoh,
Yes I'm short CMCM. It showed up on one of my Connors Short filters also had a ConnorsRSI reading of 95 or so on Friday. Down slightly on it currently.
I try to balance long and short positions overall but have been a little too short lately and its costing me this month.
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johnpaulca
12,036 posts
msg #130431
- Ignore johnpaulca |
8/15/2016 12:59:54 PM
CMCM....target price measured is $13.87
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Kevin_in_GA
4,599 posts
msg #130435
- Ignore Kevin_in_GA |
8/15/2016 4:45:14 PM
JP - any input on how you are determining the target price here? You were spot on with the high for EXAS before so I am curious ... if you are okay sharing at least some guidance on this.
Kevin
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BarTune1
441 posts
msg #130439
- Ignore BarTune1 |
8/15/2016 5:30:06 PM
JP was extremely accurate with his call on CEMP also.
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johnpaulca
12,036 posts
msg #130446
- Ignore johnpaulca
modified |
8/16/2016 12:16:39 PM
Kevin_in_GA
3,648 posts
msg #130435
- Ignore Kevin_in_GA 8/15/2016 4:45:14 PM
JP - any input on how you are determining the target price here? You were spot on with the high for EXAS before so I am curious ... if you are okay sharing at least some guidance on this.
Kevin
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I use a few ways to measure target, this is the probably most common used by traders:
(High of base-Low of base) + (High of base)
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