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Daily Options Trading Strategy (DOTS) Updated List – 3/11/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 3/11/16:

Tier 1: AAPL, AMZN, BIDU, FB, GOOGL, LNKD, NFLX, PCLN, TSLA


Tier 2: BA, BABA, TWTR, FIT, UA, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, IBM, MNST, ULTA, SQ, CAT, PX, GDDY, UPS

If you have any questions about the strategy or stock options in general, you can e-mail me anytime at kmob79@gmail.com

Free Earnings Trade of the Week: Intuit Inc. (INTU) – Reports After the Markets Close on Thursday, 2/25/16

Intuit Inc. (INTU) is scheduled to report earnings after the markets close on Thursday, 2/25/16.

Last quarter, the stock had the following price movement after reporting earnings:

Nov 20, 2015

106.28
108.00
101.17
103.20
6,622,300
102.88


Nov 19, 2015

96.93
97.68
95.79
97.42
3,985,900
97.12

This stock has a history of initially making a somewhat large price move post-earnings, but then settles down to average a moderate move only. I am going to take advantage of this here, using a Neutral Calendar Spread. The current price to pay for this trade is excellent, especially on a higher-priced stock, if you can get it at my recommend price to pay for it. This trade has the potential to make a great ROI, and carries low risk, as it will retain value either way. 10/10.

Here is how the trade is placed:

Entered Trade

Sell -30 INTU Mar16 100 Call

Buy 30 INTU Apr16 100 Call


Requirements

Cost/Proceeds
$1,800.00
Option Requirement
$0.00
Total Requirements
$1,800.00
Estimated Commission
$90.00

NBBO
0.30 – 0.90. Try to pay 0.60 or less for this trade. At a maximum, pay up to 0.66.

See the attachment for the profit/loss chart.

I will post the price to close this trade out tomorrow morning, right before the opening bell.

INTU NCS 22516

Update 1: 9:25 am EST:
Pre-market, the stock isn’t moving much at all, ideal for the Neutral Calendar Spread strategy. I am placing the price to close this trade out at 1.80. I will update any changes to this here, if needed.

A Look Ahead To Earnings Next Week: 2/29/16 – 3/4/16

Here are the stocks I will be looking at to possibly trade next week for earnings. (Note: my earnings strategies are debit spreads that are neutral-based, such as the Neutral Calendar Spread, Reverse Iron Condor, Strangle/Straddle, and with occasional long positions placed). These strategies allow me to take a non-biased approach as to direction, where a trader can profit no matter which way the stocks moves after reporting earnings.

Monday:
BSFT,CROX, GLP, LL, WDAY

Tuesday:
BGFV, BOBE, DKS, DLTR, JKS, PGR, ROST, TIVO

Wednesday:
JOBS, COST, BREW

Thursday:
AVGO, BURL, CIEN, DMND, TFM, JOY, NMBL, PRFT, SWHC, SSI, KR, TSL, WING,

Friday: BIG

Daily Options Trading Strategy (DOTS) Updated List – 2/22/16

Here is the current (4) tier list of the Daily Options Trading Strategy (DOTS), current as of 2/22/16:

Tier 1: AAPL, AMZN, BIDU, IBM, GOOGL, LNKD, NFLX, PCLN, TSLA


Tier 2: BA, BABA, TWTR, FIT, FB, CRM, GPRO, C, FDX

Tier 3: BBY, EBAY, STZ, EXPE, CMG, AKAM, DIS, BWLD, PYPL

Tier 4: HD, COST, MNST, ULTA, JNUG, CAT, PX, GDDY, UPS

If you have any questions about the strategy, you can e-mail me at: kmob79@gmail.com

Weekly Citigroup (C) Reverse Iron Condor Trade – Expires Next Friday, 2/26/16

Each week on Thursday morning, I place my Reverse Iron Condor trades. Citigroup (C) for years has been one of my favorite stocks to use this strategy with. A Reverse Iron Condor is a combination of a Bull Call Spread and a Bear Put Spread. There are 4 “legs” to this strategy. Last week’s Citigroup trade closed out a a 100 % profit, as is usually the case. The key to this strategy is to place it each week, as the compounded gains yearly add up to a very nice profit. I do not recommend trading it one week, and then skipping the next. These trades are also very inexpensive to place, so a great source of additional income weekly, and they require little monitoring. Once the stock starts moving in a specific direction, I will post the price to close out the profitable side of the trade.

Here is how the trade is placed:

Entered Trade

Buy 100 C FebWk4 38 Put

Sell -100 C FebWk4 37 Put

Buy 100 C FebWk4 41 Call

Sell -100 C FebWk4 42 Call

Requirements

Cost/Proceeds
$3,600.00
Option Requirement
$0.00
Total Requirements
$3,600.00
Estimated Commission
$600.00


NBBO
0.23 – 0.49. Try to pay 0.36 or less for this trade. At a maximum, pay up to 0.39. See the attachment for the profit/loss chart.

Q C RIC 21816

Update 1: 8:25 am EST 2/22/16. (C) is up 0.70 pre-market. I am placing the price to close the call side of this trade (bull call spread) at $0.85. On the put side, leave that open for now. There are times where both sides of the trade can profit weekly, and you do not want to sell one side too early.

Update 2: 3:05 pm EST
: STC on the put side at 0.70. On the call side, place the STC at 0.60, day order only.Will update this trade pre-market tomorrow morning

Update 3:
2/24/16: STC at 1.00 on the put side of this trade. On the call side

Trading In Volatile and Down Market Days Using the Daily Options Trading Strategy (DOTS)

I am often asked how I trade in market conditions that are unpredictable and volatile, especially down markets? My answer is simple: I really do not care what the markets are doing in terms of direction when using the Daily Options Trading Strategy (DOTS). When I check pre-market news and the futures data, I actually prefer to see the markets open down. This is usually a good sign that there will be some early call option trades that are quick in and outs.

Some investors and traders tend to flee and sell their long call or stock positions when they see the markets moving the way they are lately. I see opportunities. THE DOTS strategy has a resiliency and rigor to it that is unique. Just by looking at the trade log on my website, http://kevinmobrien.com/?page_id=480, you will see that most of the trades made are call positions. This was also the case in 2008 and 2009, my best years ever trading the DOTS. It would seem that buying puts would have been the way to go then, but not using the DOTS. Even on a stock like Citigroup (C) and other financial related securities in 2008/2009, which were falling precipitously daily, the DOTS still provided plenty of call buying opportunities daily. The way the strategy is structured, with the Bollinger Bands and the bottom 4 indicators (the Relative Strength Index, the Intraday Momentum Index, the Money Flow Index, and the Full Stochastic Oscillator, with the settings and parameters I use for each) prove to be very adept at spotting true lows daily in a given security. In fact, put trades were very rare during that time, and they still are now.

The settings used for each indicator are crucial to the success of the strategy. When I began developing the strategy, I went through every setting possible with each indicator in tandem. What I use now is the way to best use this strategy and has held up so well after all these years, under every market condition. From trading after the post September 11th attacks, the mortgage crisis and the banks, Greece and the Eurozone problems, oil fluctuations, and now with the current volatility daily. The bottom line is that the strategy works.

This strategy keeps the emotion out of trades. This is a very important aspect of it. It also requires patience and discipline. My point of this post is to not stop trading because of how the current market landscape is or what it will be in the future.

Like any trading strategy, repetition only expedites and enhances the ability to spot great trading opportunities. This is especially true when understanding the Bollinger Bands when using the Daily Options Trading Strategy. The bottom four indicators (the RSI, IMI, MFI, and the FSO) are static, in that once their respective buy points are reached, there is nothing else to look for on them. The Bollinger Bands are the most important element of the strategy. They provide a trader with great insight into the future movement of the stock and the volatility. The Bollinger Bands also show when to avoid a a trade, which is extremely important. If anyone is interested in a PDF file of my book on Bollinger Bands for free, you can e-mail me at: kmob79@gmail.com. . For day trading purposes using the DOTS, I prefer the settings as shown below:

BB 21716

TWTR DOTS 21716

One of the benefits of my subscription service is that I do all of the work for you ahead of each trade. Before each possible trade, I post the ticker symbol, the strike price, expiration, and my sell-to-close (STC) price ahead of each trade. I do all of the necessary “homework” before hand: checking any news that may be related to the stock, the daily highs and lows, the bid/ask prices, and the daily volume. My subscription service is not just an e-mail that tells you what to trade when it is far too late. This is real-time live trading, with me on Skype and Chatzy from 8:00 am EST until the markets close, and later. Along with the trades, I am always answering questions that any subscriber may have. I have a policy that if you are not happy with the service after one full week of trading, I will refund your subscription with no questions asked whatsoever.

If you have any questions about the daily strategy, the subscription, or any general questions about trading, please e-mail me anytime at: kmob79@gmail.com.

-K

A Look Ahead To Next Weeks Earnings – 2/15/16 – 2/19/16

Here are the stocks I will be looking at next week to trade for earnings:

Tuesday: CAKE, DTLK, ESRX, FOSL, PSA, RAX

Wednesday: ADI, BLMN, BRCD, CF, DPS, GDDY, JACK, LZB, NVDA, ASGN, PGR

Thursday:
CRMT, BJRI, SAM, DISH, FLS, FLR, MGM, SODA, WMT, WM

Friday: B, DE, VFC

Free Earnings Trade Of The Week: The Walt Disney Company (DIS) – Reports After The Markets Close On Tuesday, 2/9/16

The Walt Disney Company (DIS) is scheduled to report earnings after the markets close on Tuesday, February 9, 2016.

Last quarter, the stock had the following price movement after reporting earnings:

Nov 6, 2015

114.60
116.75
114.57
115.67
16,803,400
115.67


Nov 5, 2015

113.26
113.93
111.60
113.00
14,843,700
113.00

Historically, (DIS) does not move a lot post-earnings. I like the Neutral Calendar Spread here, which is a strategy that takes advantage of overpriced options and time-decay. The current Implied Volatility (IV) on the February Week 2 expiration is 86.77, while the Implied Volatility on the February 2016 expiration is 54.02. I am expecting the stock this quarter to move around $2.00 -$2.50/share This fits in well with the Neutral Calendar Spread strategy, as the break-even points are wide and the potential ROI is also high. I am giving this trade a 9/10.

Here is how the trade is placed:

Entered Trade

Sell -25 DIS FebWk2 91 Call

Buy 25 DIS Feb16 91 Call


Requirements

Cost/Proceeds
$1,000.00
Option Requirement
$0.00
Total Requirements
$1,000.00
Estimated Commission
$75.00


Greeks / NBBO

IV

DIS FebWk2 91 Call

86.77

DIS Feb16 91 Call

54.02

NBBO 0.30 – 0.50. Try to pay 0.40 or less for this trade. At a maximum, pay up to 0.43.

See the attachment for the profit/loss chart. I will post the price to close this trade out tomorrow before the opening bell.

DIS NCS 2916

Update 1: 9:25 am EST
: I am placing the closing price at 0.80. I will update any changes to this here, if needed.

Update 2: 1:48 pm EST: This trade is looking very good. STC still at 0.80.

Update 3: 2/1116: Position Closed.

Very Active Trading Day on Wednesday, 2/3/16

There have been a lot of very good trades today, all call positions. You can see the these on the Daily Trade Log at http://kevinmobrien.com/?page_id=480.

The Daily Options Trading Strategy (DOTS) does remarkably well in rough market conditions, especially down markets, as there tends to be more trading opportunities than usual, especially call option trades.

One earnings trade today on (GPRO), reports after the bell.

Earnings Trade of the Week: eBay Inc. (EBAY) – Reports After the Markets Close On 1/27/16

eBay Inc. (EBAY) – Earnings Trade – After the markets close 1/27/16

Last quarter, the stock had the following price movement after reporting earnings:

Oct 22, 2015

26.50
27.66
26.26
27.58
44,605,900
27.58

Oct 21, 2015

24.56
24.70
24.18
24.21
16,881,400
24.21

The Neutral Calendar Spread strategy on this trade is beyond cheap to place. In fact, I haven’t seen such a low cost to place this strategy on any stock in quite some time. It simply has to be placed. Even if it were more expensive, I would still use it, as the break-even points are wide, and the possible ROI is very good. This is a 10/10. A must trade.

Here is how the trade is placed: (Note: I am using 100 contracts personally, you do not have to do the same)

Entered Trade

Sell -100 EBAY JanWk5 26.5 Call

Buy 100 EBAY Feb16 26.5 Call

Requirements

Cost/Proceeds
$1,200.00
Option Requirement
$0.00
Total Requirements
$1,200.00
Estimated Commission
$300.00

NBBO
0.12 – 0.16. Try to pay 0.14 or less for this trade. At a maximum, pay up to 0.17. Try to get in this trade immediately, the price may not last long.

See the attachment for the profit/loss chart.

EBAY NCS 12716

I will post the price to close this trade out tomorrow morning, right before the opening bell.

Update 1: 9:25 am EST. I am placing the close price at 0.40

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