NWS - ready to go up?

[DTM]

Sold my put options I bought at the close of yesterday's session for 75% profit. My feeling is that it will go back up tomorrow, although hard to tell as my EOD data won't be in until tonight. Missed the opportunity when it went up as I had concerns about the amount of puts that had been bought. After buying yesterday's put options, I realised that one contract only controlled 500 shares instead of 1000.

Anyway, them are the breaks.

:drink:

 

[DTM]

NWS up 32 cents today and rising.

 

[DTM]

Although its moved up today, the share price still looks weak. Might look at buying put options today.

 

[DTM]

Bought the March 21.50 Put options @ .36 X 20 when NWS was 21.80. Could take two days to go down (hopefully).

 

[DTM]

Probably a lesson in not how to trade, bought 10 contracts of the 22 March Puts @ .48

 

[markrmau]

Might want to be careful here - todays growth figures make the second .25 interest rate increase (which has already been factored in by markets) LESS likely - that is why I said in MCR thread that todays announcement is good for miners - and today you see the AUD depreciating against USD.

So if US markets start growing strongly this month (which I suspect they will), and the AUD starts drops significantly (which is possible), you could be really rooted.

PS: this may all be crap - I don't feel I have sufficient knowledge of markets to trade derivitives.

 

[DTM]

Might want to be careful here - todays growth figures make the second .25 interest rate increase (which has already been factored in by markets) LESS likely - that is why I said in MCR thread that todays announcement is good for miners - and today you see the AUD depreciating against USD.

So if US markets start growing strongly this month (which I suspect they will), and the AUD starts drops significantly (which is possible), you could be really rooted.

PS: this may all be crap - I don't feel I have sufficient knowledge of markets to trade derivitives.

You know more than I do so I'll re-asses it tomorrow. I might just hold onto my BHP call options for a little while longer. Wish I had bought the RIO ones too!

Thanks for the advice.

 

[RichKid]

Yep, great point about the effect on the Aussie dollar, might be especially relevant to local gold stocks as the gold price rises.

 

[DTM]

Sold my $21.50 March put options at 33% loss although will keep my $22 March put options just because ex-dividend date is looming within seven days.

Just out of curiosity, does anyone know if there is a dividend or not? Looking up the information on commsec, it has March 9 as the dividend date but not dividend amount declared.

 

[Bingo]

Good rise in New York to 17.77 (up .46). This is equiv to A$22.72 at .782 conversion.

Bingo

 

[markrmau]

On paper, I might buy puts now, or would the volatility be too high to be worth it?

 

[DTM]

On paper, I might buy puts now, or would the volatility be too high to be worth it?

The upwards price movement looks too strong to buy any puts yet. When you see the price open and close at the same price as the previous days close (or lower), that may indicate that the upwards price movement is ready to retrace (profit taking). It will be especially interesting after the ex-dividend date.

Apologies also, I earlier posted that I had bought $22 March puts but forgot that it was actually $22 March calls so..., GO YOU GOOD THING.

Up over 100% :drink:

 

[markrmau]

Bloody hell, you must be making an absolute killing here. Well done!!!! (though I think I will paper trade for a while)

 

[DTM]

Bloody hell, you must be making an absolute killing here. Well done!!!! (though I think I will paper trade for a while)

Yes, last couple of months I've had plenty of cause to celebrate.

Paper trading will ensure you refine your system and lower the risk. If you need help with anything, happy to oblige.

 

[markrmau]

The upwards price movement looks too strong to buy any puts yet. When you see the price open and close at the same price as the previous days close (or lower),

I am a bit confused here. Why is the volatility pushing up the price of puts? I would expect that with NWS powering up, puts should become dirt cheap. When the open/close come closer together, the put price should become higher as the chances of retracement are higher.

What am I missing?

Thanks, Mark.

 

[DTM]

I am a bit confused here. Why is the volatility pushing up the price of puts? I would expect that with NWS powering up, puts should become dirt cheap. When the open/close come closer together, the put price should become higher as the chances of retracement are higher.

What am I missing?

Thanks, Mark.

Sorry, what I mean is that if you are looking to buy puts, wait until the current price surge slows down. I wouldn't recommend buying any puts at this stage unless you went for atm puts anticipating a big fall after the ex-div day. Yes, the puts would be cheaper now although if MM's have factored in a fall after ex-div, you will find puts more expensive.

Hope this helps.

PS an example of when to buy puts is today for RIN. Check out how its been surging for the last few days and looks like it's peaked. Buying puts on it now would be my preferred option as opposed to buying them when the price is still surging up. The other alternative of course is that you buy the puts at the end of the day like today for NWS, although I think you should wait a couple of days to make sure the price isn't still shooting up.

 

[DTM]

Oops, whilst posting, the price has dropped 15 cents so I sold my call options. Missed the opportunity to sell it at a better price so over 90% return will have to do. I think the price has shot up too much and may follow a natural retracement. Because of the strength of the movement, I wouldn't buy puts as this might only be a short retracement. I will look to go back in after the retracement (if there is one).

 

[DTM]

The price action was positive so bought back in at .35 for the $23 March calls.

 

[positivecashflow]

You are buying calls within the last 30 days till expiration? Time decay is your worst enemy in this period I would have thought...

 

[DTM]

You are buying calls within the last 30 days till expiration? Time decay is your worst enemy in this period I would have thought...

Yes, but volatility is extremely high. I also prefer it within this period as time value becomes less of a factor/cost.