Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
This diary is about my NEM trading. I always liked NEM and I like gold. So, I am going to journalize my series of transactions. Let's see what I can do.
Okay, let's move on. The first NEM trade, yes? Yes.
I am doing what is called a RadioActive trade. But it is my way of doing the RadioActive trade. RadioActive meaning the decay of the option premiums. Isn't that clever? I have 200 shares of NEM married to 2 DEC 12 60 puts. When I bought NEM, I did it with a BuyWrite, selling the May 11st 48 calls. With the 2 puts, I have limited downside. The 60 puts have a Delta of .80 so if NEM raises a point the put only declines .8 of a point. Also, I am writing the weekly OTM options against the position, as with this BuyWrite, to generate weekly income. With the 48 calls, if NEM trades tomorrow at 48, I will buy 200 more shares to cover the call position and sell two more OTM calls.
When you look at the weekly/daily chart you can see why I married 2 puts to NEM.
I wrote the 47 calls Friday vs. the 48s for the better premiums. NEM's looking like it's trying to find a bottom. So I have to be on guard against a quick move up to 47.
come later in the afternoon, I saw the market melting down along with the gold stocks, NEM, so I rolled down two strikes for the premium. 47 to 45. Now I must guard 45. It's like playing 21, when the dealer collapses, jump on it.
I traded NEM. It is just all over the place on the price ladder, so I used a STPLMT order. If my trade failed, I wrote the 44 calls since tomorrow is options expiration and it costs a dime to call 100 shares. I am a point and a quarter above 44. I tried the 2 range and 4 range, but they are choppy, so I settled on the 30 second chart.
I have enough juice in my account for another 200 shares which are needed for straight trading and at the end of the day to write 2 calls for next week, if NEM stays above 45.
The 30 second chart trades well, just read it and trade it. But price moves fast............