Monday, July 20, 2015

How I Traded Stress Free On $FB


How I Stay Stress Free


Unlike a lot of traders I know - I don't stay glued to my computer or phone.  I don't want to spend my valuable time sitting around watching every tick on a chart or second guessing decisions on my trades.  Most important of all, I want to give myself the ability to enjoy time with my family, who also live busy lives!

How I Traded $FB


On July 14th, I placed a contingent order on $FB through an option trade.  In the last week of July I went with a $87.50 / $90.00 put credit spread for 85 cents -  with a setting for the trade to expire on July 24. Other traders may approach this differently but I never place a naked put on my credit trades.  There's simply too much risk on naked puts for my comfort level.

I had just gotten back from my European vacation so I was in catch up mode and I had an evening IBD® Meetup to prepare for as well.  I simply didn't have the time to sit around watching and making tweaks so I trusted to my pre-planning.  

Here's an example of how you can use a call and a put to protect a trade on $FB as well:


Call & Put for $FB from Amin Hemani on Vimeo.



The Result?


My trade was filled that afternoon and just 3 days later, my personal life took precedent again.  Last Friday, I carved out some time to attend my 5 year old granddaughters performance as the Wicked Witch of the West in her summer camp play.  The performance wrapped up by 3.30 pm and it was the highlight of my day!  What's more, my credit spread trade on $FB closed out according to my contingent order for profit and it all happened without any interference from me!

My Market Outlook


It has been a pretty hectic weekend for me as I've tried to get back into my research routine. After being away for 3 weeks, my batteries are re-charged and I've got a fresh approach and outlook which is a good thing.

I noticed that a lot of banks reported earnings last week and showed some strength.  The retail sector is also in the lime light this week. Financial and Consumer Discretionary ETF's are up by 4% in the last two weeks as well. The technology sector is almost up by 8% in the same period mainly because of a dramatic gap up moves on $GOOGL, $GOOG, $CELG and $FB.

The IBD® market pulse indicates that we are in a confirmed uptrend thanks to a powerful rally last week. Our distribution count has fallen off to just 9 between the $SPY and $NASDAQ  so market health has certainly improved but I'm not convinced that we are out of the woods yet.

What I'm Watching


The next two weeks put us right in the midst of earnings season and some stocks that would usually make it through my funnel are getting weeded out as a result.  Variables like earnings and government involvement introduce a level of risk I can't control so I shy away from taking positions when things like that are hanging around.  

Here are a few stocks that I will be watching once earnings are out of the way:

$VRX
$CNC
$CELG
$UTHR
$FB
$GILD
$UA

Happy trading!


DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.