Silence = Stung

What to say? Silence = stung. Still adjusting to the environment. 1 win, 5 straight loss.

Human vs Machine

I'm not that active in trading options because I have limited capital. After 2 months of staring at the option quotes, I realize that I'm trading against machines! Yes, the buy/sell queues can change tremendously fast based on the price of the underlying shares. At first I was puzzle. I thought that the Americans can be really quick in pushing buttons. But then I saw the change correlates with the price, from there I remember something that 20-30% of the trading in US are done using computers (something like that, can't remember the actual figure).

Are machines going to replace humans? No wonder the advertisement for analyst includes building complex models/algorithm.

Anyhow, I think that human is still superior as compared to machine even though the hand cannot be as fast as CPU. This is still a research area and when the time arrives where the machine will be as good as the human, I think that, that will be the day trading will end as no fools will dare to go against the machine anymore.

Verizon

Made a 2 day trade with Verizon Jul 42.50 Put. I think that I'm going to change my strategy to buying low time value put options. Going down is much faster than going up. So, if I get it right the direction of the stock, can get a quick profit without risking my money in the market.

Halliburton (HAL)

Okay, I am bad in managing my option position. The swing for the option is so large. The correction from 5.90 to 3.80 is greater than I though. Thus, I decided to close out my October Call with a little bit of profit. I'm still having my PFE though and looking to close this position with a loss.

Lesson learned: Will not sit out any correction for options. Just buy/sell at swing ends.

Pfizer (PFE)

Pfizer attracted my attention because it was in the top 20 volume for a few days and I know it is selling Viagra. The rest, I don't know. Well, from the chart, it looks like it has broken the downtrend channel. The options are still priced lowly because everyone is still expecting it to go down. As I'm not sure how fast it can go up, the options that is near my comfort time zone was the 2007 Jan. So I decided to buy 2007 Jan 30.00 Call. Hopefully it can perform just like it's best selling drug.

Halliburton (HAL)

HAL attracted my attention because it is an O&G company. I will never choose this company if not because Dick Chenney has something to do with it. Anyway, the first option that I bought was 2007 Sept 32.50 Call. Well, as usual, after I bought, the option went up 0.20 and then HAL reverses, and my call was suddenly worth 1.95! What a volatility! I panic and decided to take a loss. The order was not filled and again the market proves that I always sell at the lowest low!. Now the option is back to 3.00 range.

HAL looks like it has broken the tringulation with further upside. I hope that this stock can move fast enough for my first lucky break in options.

My First Post

The earth has 24 hours. 8 hours spend in Bursa Malaysia. 7 hours sleep. What to do in the remaining hours?

This blog is about my trading experience in US options. Why options? The are just like warrants. The difference is you can buy long or buy short...errr something like thatlah. I am not going into the details, you can just google it somewhere else.

Well, I got 2 years of complete data for the US market. Got it for free from eoddata.

I have been collecting the data for 2 years plus before I start my first trading last month with optionsXpress. He he he...too stingy to pay for the data :p

Anyhow, due to the limited period of data, I can't do a full filtering of the counters as I have down with Bursa Malaysia. I have to rely on websites such as SchaeffersResearch.com for ideas. Luckily, Yahoo provides free historical data. However, the task is a little bit tedious as I have to download manually the counters that are highlighted in the by them.

That is one problem, the next problem is that there are around 3000 counters in Nasdaq and another 3000 in NYSE. Wah lau eh! The worst is that the counters are represented by alphabets that are 1 to 4 characters long! It totally makes no sense to me! My estimated is that it will take at least 1 year to get myself familiarize with the codes for maybe 10% of the counters.

Anyhow, my seed money for this new adventure will be very small. Not sure whether I will be wiped out within one year. Hopefully not. From what I observe for the past 1 month, I think the techniques I employ in Bursa Malaysia still works with US options.

I pry pry Ti-kong that luck will be by my side.