If you want to look over the shoulder of an active trader as he makes his trades and hear him discuss why he’s making the moves he is, check out the following article by The Options Dude. In it he talks about trades he’s currently making on ONXX and SLW.
It has been a while since I reported any activity in ONXX so I wanted to take the few minutes that I have free during lunch to do that. I doubt that you have been following this particular stock very closely, but it has been experiencing some volatility recently. Earlier this month, it traded just under $30 per share and today it has been over $36 per share. Since I had some outstanding Oct $32 strike calls, I thought that I should close those out but wanted to sell some Nov $36 strike calls first.
I sold those today at $2.75 per share which I felt was a decent price. I am still waiting to buy back the Oct $32 calls. I have an order in for the day at $3.60 per share which means that I would essentially be buying $4 worth of equity for $0.85 per share. That is a decent trade if you ask me. Of course, ONXX would have to maintain some strength over the next month, but that would put my called out price within striking distance of my overall basis going into the November option cycle.
I would be very pleased with that considering the difference was close to $5 per share not too long ago. I look at a decreasing loss and profit as the same thing. The strength would also give me an opportunity to tighten the puts somewhat as well. Right now, I have Oct $28 puts but will be looking at prices in the 30’s for November. If I could get the November $32 strike puts for $1, that would be very nice.
As far as SLW is trading, the stock has taken a beating along with the price of silver. It is trading near $30 per share which doesn’t really bother me since I have October $35 puts. I will simply sell at $35 and buy back more shares at a lower price. Even though my basis is $37.56, buying more shares at the lower price will keep me within a reasonable range and ready to profit when the next spike happens.
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