Another Volatile Week
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home | Options Trading Archive | Another Volatile Week

Another Volatile Week

Henry Gambell
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As I prepare for what's shaping up to be another volatile week, here's a few cardinal things I like to keep in mind.

1)    What's our economic situation like? Part of the reason I expect some volatility this week is due to the number of economic reports we have. There are several sites you can visit to find this information. We have new home sales today at 10EST, consumer confidence tomorrow at 10EST and the number I'm really looking for is on Friday, the GDP numbers at 8:30EST. I do my best to not step in front of these reports.


2)    What companies are preparing earnings reports?Part of my trading plan includes avoiding day or swing trades on companies that are about to post earnings. These numbers, along with their reaction can be hard to judge and it's best to just avoid them.


With these things in mind, let's look at a play I'm setting up on AAPL. We have several time frames lining up for a move to the upside, and while I won't be holding these into Friday's GDP number, this play should be good for a few points to the upside while the ES goes on to test previous highs around 1127.50. I'll be buying the AAPL 250 calls @ 14.00 using recent highs and lows, 265.15 and 254.00 as stops and targets.

Position at time of publication: Long August 250 calls @ 14.00

 Symbol AAPL
 Action (Buy to open/Buy to close/Sell to open/Sell to Close) Buy to open
 No. of contracts (where applicable)  
 Expiration month August 2010
 Strike price 250
 Type (Stock/Call/Put) Calls
 Trade price 14.00
 Spread (better than/none) xxxxxxxxxxxxxxxx
 Position? Buy To Open

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