Thursday, December 08, 2005

Momentum Trade

Today I purchased a January 2006 Titanium Metals $80 Call. I admit the stock is overbought but I only plan on holding the call for a short period of time.

Note: I am already long the common stock (TIE)


Blogger pigpen01 said...

Hello Big Ben,

My name is Ben also, and I'm an investor myself. I bought TIE Jun 06 70's the same time you did and managed to get out today at the peak. I'd rather be lucky than good.

So do you think the party is over or is this a minor correction? Timet is still way overbought and well above it's 30day average trend line. I am still bullish on titanium until mid-2006, and I want to get back in. I think the stock will come down to the low 60's, and once an uptrend re-establishes itself, I'll buy my TIEFN's back.

I like some of your investment moves. Maybe we should talk further. I primarily sell covered calls and shoot for 6% returns a month. I also buy long-term options of stocks I'm particularly bullish on. Drop me a line sometime.


12/09/2005 2:25 PM  
Blogger pigpen01 said...

P.S. Good call on getting out of NDAQ. I sold a December covered call on them for a 6.1% return, but now I'm stuck for another week since the trend broke. I'm banking on that $39 resistance!!

12/09/2005 2:35 PM  
Blogger Roberto said...

I would be getting out of TIE asap. That is serious distribution. The fib retrace can take it down to $50 easy and it's still in a bullish trend.

12/09/2005 9:37 PM  
Blogger Big Ben said...

I am still holding Jan 80 Call. I logged onto my broker in the AM and saw that it was worth over $6.00. I should have just taken the profit, got greedy. There is still over a month until expiration, I am confident that TIE should see $75 next week.

12/10/2005 2:28 PM  
Blogger Big Ben said...

I have little investing experience (14 months) in general and especially with options (5-6 months). I was going to post about Wal-Mart Leaps in October but then Cramer mentioned it on his show and I passed. I liked the Wal-Mart 2007 $50 Calls back then. I am more bearish on WMT short term. I really haven't had a chance to look at option pricing recently. GOOG and CME always look interesting. Especially with GOOG now being added to the Nasdaq-100.

12/10/2005 2:33 PM  
Blogger pigpen01 said...

Hey Ben,

I'm relatively new to investing myself. I decided that being happy with 10% returns a year on mutual funds some retirement planner sold me was pathetic, so I struck out on my own. I've been trading for about 4 months now. It's been a good move so far. I went long on Google at $300, put money into an Eastern European mutual fund, and covered call writing has been going well.

I have developed my own covered call strategy that will hopefully return upwards of 100% a year for relatively low risk. Most people sell covered calls hoping they don't get called out so they can keep the stock. I hope all of mine are exercised.

I like knowing my rate of return at the beginning of the trade-not the end, and I also like to get in and get out. I try to find CANSLIM type stocks paying 6% returns on slighty out of the money current month calls. The trick is finding stocks that are paying 5-6%!

I like this strategy for several reasons. One, a steady 6% return a month is awesome for a conservative investment vehicle. Two, the higher the call return, the more downside protection I have. Three, if the call is so expensive, it's a good indicator that a lot of other investors are bullish on the stock also. The disadvantage is that you lose the explosive growth of CANSLIM stocks. Still, 100% APR is nothing to scoff at!


12/11/2005 7:57 PM  
Blogger Roberto said...

Ben, never ignore volume like that on TIE. That is distribution.

12/12/2005 8:41 AM  

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