Comments on: How Do You Scan For Trades? http://optiongenius.com/blog/how-do-you-scan-for-trades/ The Option Genius Blog Wed, 08 Sep 2010 03:10:12 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Xueren Zhang http://optiongenius.com/blog/how-do-you-scan-for-trades/comment-page-1/#comment-120 Xueren Zhang Sun, 11 Oct 2009 05:51:12 +0000 http://optiongenius.com/blog/?p=114#comment-120 My experiences of selling directional put or call spread are 1.Market condition.From March to Now,the market has been in a strong upward trend "bullishness" has made it to sell put spread of far enough striking price.Stocks like AAPL and GS are market leaders.Twenty points away are good bets.Low beta Dow stocks like MCD,WMT,KO,PG,CVX,XOM (dead money,but have well defined trading ranges) are also good bets. 2.Chart readings are very important.Support and resistance.I like oversold and over bought conditions for those dead and low beta Dow stocks which I , on the average, make a trade of either selling put spread or call spread every two months for income.But as the market mostly are trending up , this unique market makes it easy to sell put spread ( not last year ).From April to now,I traded at least 50 put spreads.My successful rate has been almost 100%,and I always let them expired worthless. 3.Fundamentals of put spread selling stocks are also very important.Mostly,they got to have steady earnings,history of increasing dividends ( dividends never lie ,especially in difficult times).APPL and GS have been right in a specific right time ( but they dropped dramatically last year,and can happen again if there is a double recession ). 4. I always have reserve funds to buy stocks which I sold put spread,because I love to own them at lower prices.For example , I sold MCD Oct 52.5-50 spread ( 10 contracts for a credit os $350.00.roi of over 10% in 30 days ).Before trade ,I figured it out that I loved to but 1000 shares of MCD below 52.5.I would thank Allen to suggest a MCD butterfly trade when MCD was around 55 in Sept. 5.Directional credit spreads are difficult to get adjusted as Allen has pointed out again and again.They are not suitable for every one with very limited funds. However,if carefully selected and diversified,they can produce sizable income.This month, my trades are AAPL ( 145-150,155-160,170-175),GS(155-160,165,170).MCD (50-52.5),wmt(47.5-45),NEM(41-39),FCX( 60-55),CVX (60-65),PEP(55-57.50) are all likely winners,expiring worthless. Member of Option Genius Xueren Zhang I just sold to open 10 CVXWM and bought to open 10 CVXWL ( I also own the stock ) for a total credit of $ 350.00).The company announced better earning ahead.Technically,it is poised to break out 72-73 resistance . I expect the spread expires wothless by Nov 21. My experiences of selling directional put or call spread are

1.Market condition.From March to Now,the market has been in a strong upward trend “bullishness” has made it to sell put spread of far enough striking price.Stocks like AAPL and GS are market leaders.Twenty points away are good bets.Low beta Dow stocks like MCD,WMT,KO,PG,CVX,XOM (dead money,but have well defined trading ranges) are also good bets.

2.Chart readings are very important.Support and resistance.I like oversold and over bought conditions for those dead and low beta Dow stocks which I , on the average, make a trade of either selling put spread or call spread every two months for income.But as the market mostly are trending up , this unique market makes it easy to sell put spread ( not last year ).From April to now,I traded at least 50 put spreads.My successful rate has been almost 100%,and I always let them expired worthless.

3.Fundamentals of put spread selling stocks are also very important.Mostly,they got to have steady earnings,history of increasing dividends ( dividends never lie ,especially in difficult times).APPL and GS have been right in a specific right time ( but they dropped dramatically last year,and can happen again if there is a double recession ).

4. I always have reserve funds to buy stocks which I sold put spread,because I love to own them at lower prices.For example , I sold MCD Oct 52.5-50 spread ( 10 contracts for a credit os $350.00.roi of over 10% in 30 days ).Before trade ,I figured it out that I loved to but 1000 shares of MCD below 52.5.I would thank Allen to suggest a MCD butterfly trade when MCD was around 55 in Sept.

5.Directional credit spreads are difficult to get adjusted as Allen has pointed out again and again.They are not suitable for every one with very limited funds. However,if carefully selected and diversified,they can produce sizable income.This month, my trades are AAPL ( 145-150,155-160,170-175),GS(155-160,165,170).MCD (50-52.5),wmt(47.5-45),NEM(41-39),FCX( 60-55),CVX (60-65),PEP(55-57.50) are all likely winners,expiring worthless.

Member of Option Genius

Xueren Zhang

I just sold to open 10 CVXWM and bought to open 10 CVXWL ( I also own the stock ) for a total credit of $ 350.00).The company announced better earning ahead.Technically,it is poised to break out 72-73 resistance . I expect the spread expires wothless by Nov 21.

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